CAA Contemporary Analytical Agency

World coal market: brief overview

Over the past week, thermal coal quotes on the European market reached a new all-time high, which exceeded 265 USD/t, adding
50 USD/t within one trading session, after the start of Russia's military operation in Ukraine amid the boost in gas indices on the European trading platform TTF to 87.5 EUR/MWh (+11.8 EUR/MWh w-o-w), lower average daily temperatures in some European countries and an increase in electricity prices in Germany.
Quotes of South African material soared to 250 USD/t, driven by high demand from India and the political conflict between Russia and Ukraine. Coal stocks at RBCT terminal amounted to 3 mio t (+0.6 mio t w-o-w) due to issues with coal deliveries via Transnet railway net and current congestion at RBCT, where average vessel waiting time totaled 6 days (+3 days w-o-w).
In China, spot prices for 5500 NAR dropped by 2 USD/t to 161 USD/T FOB Qinhuangdao, caused by the tightening of price control measures by China's National Development and Reform Commission (NDRC).
Australian coal quotes spiked above 255 USD/t, following the European indices as the situation between Russia and Ukraine escalated and the coal supply shortage in the international market intensified.
Indonesian 5900 GAR fell to 139 USD/t FOB Kalimantan on issues with exports supplies due to adverse weather and the need for mining companies to comply with domestic supply obligations (DMO). Indonesian Ministry of Energy and Mineral Resources is now checking DMO compliance on a monthly basis to avoid a repeat of coal shortages on the domestic market in the future.
Australian metallurgical coal indices climbed above 455 USD/t on the back of the supply shortage owing to adverse weather in Australia and increased demand from Asian steelmakers.

#уголь #рынокугля #СовременноеАналитическоеАгентство CAA Contemporary Analytical Agency

Russian coal mines suspension gains momentum in 2022

Federal service for environmental, technological and nuclear supervision of Russia (Rostekhnadzor) has summarized the outcomes of intensified inspections of coal mines since the beginning of February 2022. As a result of the revealed violations, operations of a number of mining enterprises in Kuzbass were suspended.
Coal extraction was halted at Pervomayskaya mine (owned by Severny Kuzbass JSC) and Yuzhnaya mine (SDS Holding Company) for non-compliance with mining technology. The restrictions also affected Osinnikovskaya mine (Raspadskaya Coal Company).
In February 2022, Rostekhnadzor identified methane accumulation and suspended production for 10 to 90 days at three mines in Kuzbass, including Alardinskaya mine (Yuzhkuzbassugol), Yesaulskaya mine (Evraz Holding) and Anzherskaya Yuzhnaya mine. Also, due to the mining technology violations, operations at the south face of the coal mine #12 (Stroyservis) were ceased for 90 days. On February 15, Kirova mine (SUEK-Kuzbass) had to halt coal mining after numerous violations were discovered by specialists of the Federal service.
The safety checks at coal mines and open-pit mines increased significantly after the accident at Listvyazhnaya mine that killed 51 people last year. The regulator's attention was also drawn to the fire at Rubana mine, owned by SUEK, where coal production was also suspended on December 19 because of the incident (see CAA Russian Coal Weekly dated December 24, 2021). In December 2021 Rostechnadzor also temporarily halted coal extraction at Sibirskaya mine and at TalTEK open-pit mine, where mining operations were carried out with numerous violations (see CAA Russian Coal Weekly dated January 21, 2022).
In addition, at the end of 2021, Russian Deputy Prime Minister Alexander Novak stated that the government should stop issuing new licenses for underground coal mining in the Kuzbass region. According to Novak, as the licenses expire, the number of mines should decrease.
At the end of January - beginning of February 2022 about 15 coal-mining enterprises were halted. The emerging trend of suspending coal mines after mass inspections may have a significant impact on the volume of production and supply of Russian coal to the world market.

#уголь #рынокугля #СовременноеАналитическоеАгентство CAA Contemporary Analytical Agency

World coal market: brief overview

Last week, thermal coal indices on the European market fell below 170 USD/t, despite the persisting supply shortage in the global market. The price decrease was caused by the news on de-escalation of tensions on the border between Russia and Ukraine. Forecasts of milder weather in the northwestern Europe and an upward revision of the wind generation forecast in Germany also put pressure on coal quotations.
Coal stocks at ARA terminals kept decreasing to 3.1 mio t (-0.3 mio t w-o-w).
South African coal prices continued hovering around 200 USD/t, driven by growing demand from European consumers, owing to a sustained tight supply, particularly from Russian companies.
In China, spot prices for 5500 NAR fell by 25 USD/t to 163 USD/t FOB Qinhuangdao. Pressure on indices comes from a statement by China's National Development and Reform Commission (NDRC), according to which FOB 5500 spot quotes should be capped at
142 USD/t instead of 157 USD/t previously reported and 110 USD/t EXW. Moreover, the regulator urged Chinese companies to increase production. Authorities in most Chinese provinces published an official notification on the introduction of the price cap. Nevertheless, some large suppliers and traders are not able to sell coal at the set prices, as they do not cover their costs.
Correction on the paper market, caused by profit taking amid the drop of coal indices in China led to a decrease in Australian material prices below 230 USD/t.
Indonesian 5900 GAR climbed to 140 USD/t FOB Kalimantan, supported by the limited supply due to a spike in the number of Omicron cases among employees of mining and coal transportation companies.
Australian coking coal indexes remained below 440 USD/t. The growth of metallurgical coal prices is limited by reduced demand on the back of steel production restrictions in China for the period of the Olympic Games.

#уголь #рынокугля #СовременноеАналитическоеАгентство CAA Contemporary Analytical Agency

Coal shipments to Rosterminalugol constrained by rail issues

The logistical issues in Russia have been disrupting coal railings since Q4 2021, leading to the material being held up at mines, further limiting supply of the crucial material in the global market. In 2022, the situation has not improved, quite the contrary.
As compared to the planned tonnage, 0.5 mio t of coal or 24% were underloaded to Rosterminalugol (Ust-Luga Coal Terminal) in January 2022 and 0.5 mio t of coal or 66% in February 2022. In January 2022, due to reduced coal railings, Rosterminalugol, the largest coal terminal in the west side of Russia, received only 1.5 mio t of coal, down 20% y-o-y. In February 2022, the terminal expects to receive just 0.7 mio t, a whopping 59% drop y-o-y and 53% m-o-m. In fact, Rosterminalugol is able to handle up to 28 mio t per year. Last year 24.3 mio t were exported through the terminal which means that monthly throughput has to be 2 mio t at least.
RZD, Russian state-owned rail operator, fails to deliver proper volumes of the cargo to the port despite the approved schedule. This is largely caused by rail maintenance, a large number of abandoned trains on the railway network as well as a lack of workforce affected by COVID-19 and omicron variant, resulting in lower locomotive availability. Usually, RZD replaces 3 coal trains with 1 container train, prioritizing the latter.
Subsequently, KRU (Kuzbassrazrezugol), the major coal supplier through Rosterminalugol, struggles to move some of its coal to the terminal and falls short of its plans. However, the mining giant can’t declare force-majeure officially, because RZD continuously imposes bans on coal shipments without providing any documents related to such restrictive measures.

#уголь #рынокугля #СовременноеАналитическоеАгентство CAA Contemporary Analytical Agency Ростерминалуголь

World coal market: brief overview

Last week, the European market saw a drop in thermal coal quotations below 180 USD/t amid lower gas prices, the lifting of the ban on coal exports from Indonesia and the probable easing of tensions around the political situation between Russia and Ukraine. Moreover, the US administration asked the largest LNG consumers in Asia-Pacific to reduce purchases in order to increase supplies to Europe. Milder weather and the growth of wind generation in Europe were additional factors, which had a negative impact on coal prices.
Coal stocks at ARA terminals decreased to the lowest level since June 2016, amounting to 3.5 mio t (-0.2 mio t to January 26, 2022).
South African indices pulled back from 3-month highs, slumping to 185 USD/t as the ban on coal exports from Indonesia was lifted. At the same time, coal inventories at Richards Bay Coal Terminal decreased to about 2 mio t, which is a record low level for the last 5 years. In 2021, South Africa's total coal exports fell to a 20-year low of 63 mio t (-10 mio t or -14% y-o-y), resulting from rail infrastructure issues.
From January 31 to February 06, China is celebrating the New Year, significantly reducing business activity in the domestic market. Chinese spot prices for 5,500 NAR strengthened by 5 USD/t to 176 USD/t FOB Qinhuangdao. Nevertheless, China's National Development and Reform Commission (NDRC), following a meeting with major mining companies last week, stated that domestic thermal coal prices could fall after the holidays. The NDRC instructed suppliers not to raise prices above 140-157 USD/t FOB and 110 USD/t EXW for 5,500 kcal/kg NAR, while urging rail and port operators not to accept cargos, priced above this threshold.
Australian coal prices plunged below 230 USD/t as exports recovered, following a decline in COVID-19 cases in Australia, the lifting of the ban on coal exports from Indonesia as well as low trading activity due to the Chinese New Year holidays.
Strong demand from China, ahead of the Olympics and Chinese New Year holidays, supported Indonesian 5900 GAR up to
135 USD/t FOB Kalimantan. Indonesia completely lifted the coal export ban, imposed by the government from January 01 to January 31, 2022.
Australian coking coal indices maintained at historical highs of 440-445 USD/t, driven by the persisting supply shortages on the global markets.

#уголь #рынокугля #СовременноеАналитическоеАгентство CAA Contemporary Analytical Agency