The rise in global petcoke prices does not seem to be slowing down, with a CFR East Coast India deal heard this week for April loading at $119/mt.

While sources continue to say supply remains tight, many are hard pressed to believe deals are getting done at these levels.

“Supply is still tight, and I still don’t think there is much available, but what is going on?” said a European trader.

A West India-based trader said prices are seeing support owing to limited availability while a number of US refineries are carrying out maintenance.

There is hardly any Indian interest now given the high prices, added the Indian trader.

He said the indicative bid for US petcoke is around $110-$115/mt on a CFR basis while the offer was at $120/mt CFR India. The Indian trader said the market is sluggish due to the strength of prices, even though it is peak buying season for India and there is hardly any imported petcoke ground stock left.

Even domestic petcoke producers are not actively making any offers as they are busy closing their books for the financial year, the source said.

The trader said tight supply as well as demand from other regions, such as Turkey and Latin America, are keeping prices afloat.

A South India-based trader said he heard an offer for US petcoke as high as $130/mt CFR India.

“I don’t think anyone will be willing to buy at these levels,” he said, adding that there are hardly any offers for petcoke and with coal getting cheaper, Indian demand would continue to wane.

In addition, higher freight rates have been adding to the pressure on the landed cost.

According to the West Indian trader, a correction in prices is inevitable by April because nobody in India will be buying petcoke at the existing levels.

Meanwhile, softness in coal prices will also weigh on petcoke, said the West Indian trader.

S&P Global Platts on Wednesday assessed 5,500 kcal/kg NAR coal delivered into West India at $87.80/mt CFR, down 9% from its year-to-date high of $96.15/mt on February 23 but up 21.6% from the year-ago level of $72.95/mt.

In Turkey, petcoke demand continues to be weak as buyers wait for prices to follow coal lower.

On a calorific value-adjusted basis, petcoke has become more expensive to burn than coal as the two fuels have been trending in opposite directions, sources said.

Houston (Platts)–21 Mar 2018 939 pm EDT/139 GMT

–Andrew Moore, Jeff McDonald, Arusha Das
–Edited by Keiron Greenhalgh

Dear Friends,

We all are in coal business and we always follow domestic market and international news to make a correct decision.

Earlier in this week, I have read a news report on pet coke and demand on US coal article published by Reuters and same has been republished by ET & Money control. You may refer below link to view news.

Earth moving equipment sits by a coal pile at the Century Mine in Beallsville, Ohio, U.S., November 7, 2017. REUTERS/Joshua Roberts

Read more

Coal, which powers around three-quarters of India’s electricity, will continue to be the foremost energy source over the coming decades, government think-tank Niti Aayog said in its Three-Year Action Agenda released Thursday.

It is important that India increases its domestic coal production to provide energy security and reduce its dependence on imports, it said.

By 2019, the government will explore 25% of the untapped 5,100 sq km coal bearing area to ensure availability of more coal mining blocks, it said.

There will also be efforts to convert 25% of the 139.15 billion mt of coal reserves that were in the ‘indicated’ category as of March 31, 2016 into the ‘proved’ category by offering top exploration companies attractive contract provisions, the report said.

It also suggested using market mechanisms to open the coal mining sector for commercial mining and allowing specialized mining companies to help improve efficiency in the sector.

“We must also take steps to transition to coal pricing on commercial lines. There is need to end the current practice of segmenting coal markets between power and non-power sectors with subsidies being given to the ultimate intended beneficiary through direct benefit transfer,” it said.

The think-tank has recommended spinning off state-run Coal India Limited’s subsidiaries into separate entities so that each can independently develop its own strategy and business model.

The report also highlighted the critical role of railways in coal distribution. By 2019, the government must complete the three critical railway lines, Tori-Shivpur, Jharsuguda-Barpalli and Mand-Raigarh, to significantly augment coal evacuation, it said.

Coal India has to raise its production to 1 billion mt by 2019-20, while Singareni Collieries Company Limited is seen increasing output to 80 million mt by 2019-20. Production from captive blocks has been targeted at 400 million mt by 2020.

Niti Aayog said yearly targets should be drawn up and, where required, coal mines should be re-allocated to achieve the target. It also suggested that India should, like China, take steps to cut use of low quality coals.

–Sapna Dogra, newsdesk@spglobal.com
–Edited by Jeremy Lovell, jeremy.lovell@spglobal.com

Coal prices’ march to eight-month highs, driven by China’s huge appetite for power consumption, looks like an interlude in a longer-term decline and is seen losing traction later this year.

Investors widely anticipate a slow demise for coal use due to policies encouraging cleaner natural gas and renewable energy generation, but the shorter-term outlook for the industry has seen a sharp reversal of fortunes.

Asia’s benchmark physical coal prices GCLNWCPFBMc1 have gained more than a third from lows seen in May to nearly $98 per ton, while European benchmark API2 2018 coal futures are at eight-month highs of around $74 a ton.

Recent gains are largely due to high demand in China, where power consumption has jumped more than 6 percent since the beginning of the year.

This month, torrential rains forced China to cut capacity by as much as two thirds at its Three Gorges and Gezhouba hydropower plants in an effort to ease pressure on the Yangtze river, forcing utilities to switch to coal.

Three Gorges is by far the world’s biggest power station, with an installed generation capacity of 22.5 gigawatts – equivalent to around 20 coal-fired power plants.

Heatwaves in the north also boosted air-conditioning demand, while coal mining and shipping were hampered due to adverse weather in Indonesia and South Africa. Production in Australia was disrupted by a strike.

Many of these conditions should ease next month, however.

“Downside (to prices) is likely from the end of August but a lot depends on China,” said Wayne Bryan, analyst at Alfa Energy.

China’s decision last year to cap domestic mining output resulted in a sudden surge in overseas orders by its utilities and triggered a price spike.

However, there have been several Chinese policy changes since, surprising traders and contributing to a price slump in late 2016 and earlier this year.

Singapore-listed commodity merchant Noble Group (NOBG.SI), a major global coal trader, reported a $129.3 million loss in May for the first quarter this year to which coal prices heavily contributed.

“Intermezzo”

China had cut coal capacity by 111 million tonnes by the end of June, representing 74 percent of its target for this year.

“China is likely to continue the consolidation of its coal mining industry, yet will probably try to avoid production being slashed in the way that happened in the past,” analysts at Commerzbank wrote.

“We regard the latest price rise as merely an intermezzo and expect coal prices to fall again in the second half of the year.”

Analysts expect average futures prices to fall to $60-$70/ton in the third and fourth quarters of this year and $50-$65/ton in the first quarter of next year.

China plans to add 200 million tonnes of new coal mining capacity this year, in addition to the 90 million tonnes already added in the first half of this year.

In January, the National Development and Reforms Commission said it wanted Chinese coal prices to trade in a range of 500-570 yuan a ton, and would take action if they were outside this.

“With prices now trading above the range, there are growing expectations that the government will take steps to increase domestic supply,” analysts at ING Research wrote.

At higher price levels, many miners are making money and there is a good chance that new supply will come to the market, said Georgi Slavov, head of qualitative research at commodities brokerage Marex Spectron.

“We saw this spike coming but did not expect it to last this long. (For European physical prices) to go down to $70 a ton, we would need to see supply increase to 20 million tonnes a week. It is now 17 million.”

Physical prices are currently around $83/ton.

The extent of any decline would also depend on power demand in China, which traditionally rises toward the peak winter demand season after September, traders said.

Although there is no shortage of Asian supply, output from

Indonesia’s Kalimantan island – one of the world’s biggest thermal coal export regions – is also erratic due to bad weather, corruption probes and port disruptions.

Editing by Dale Hudson

LONDON/SINGAPORE (Reuters)

Worldwide demand for coal decreased in 2016, for the second year in a row.

Humans used 53-million tonnes of coal less than in 2015, according to this year’s statistical review of energy provided by BP. It’s a decrease of 1.7 per cent.

It is the second-straight year that coal demand has declined.

It is also said that worldwide production of coal decreased by six per cent. Production at U.S. coal mines fell by 19 per cent while China’s coal production fell by nearly eight per cent.

On the whole, coal’s share of global energy consumption fell to 28 per cent, the lowest since 2004.

The numbers reflect the trend of nations shunning coal in favour of cheaper, cleaner ways of producing electricity — chiefly natural gas, wind and solar.

The statistics are at odds with U.S. President Donald Trump’s recent reasons for pulling out of the Paris Climate Accord; in which he said he wanted to bring coal back to the U.S.

As Trump doubles down on coal, the rest of the world appears headed in the opposite direction.

In Trump’s reasons for backing out of the Paris accord, he listed job losses.

Trump recently opened the first coal mine of the Trump Era, according to a headline from Fox News. The mine added only 70 new jobs in Somerset County, Pa., while over 400 people applied.

Critics say that focusing on renewable energy will bring the same number of jobs to the U.S. that would leave because of declining coal production. In fact, by focusing on coal, experts say the country risks losing the chance to lead the world in developing environmentally friendly technology – and generate the jobs that come with it.

The report shows that China, where the government is investing hundreds of billions in green energy programs, overtook the United States as the world’s largest producer of renewable energy.

Renewable energy made big gains, according to the report, growing 14 per cent in 2016. More than half that growth came from new wind turbines.

With coal’s demise, growth in planet-warming carbon emissions has flattened even as global demand for energy continues to rise. CO2 emissions from energy consumption increased by only 0.1 per cent in 2016. Since 2014, the average emissions growth has been the lowest over any three-year period since the early 1980s.

© 2017 Global News and the Canadian Press

So it turns out global warming isn’t that bad after all.

That’s exactly the conclusion Justin Ritchie doesn’t want the world to draw from the paper he just published.

And for a good reason. It’s wrong.

Justin Ritchie’s paper goes to the white-hot center of the climate policy debate in Washington. SOURCE: Justin Ritchie

Ritchie, a Ph.D. candidate in resources and the environment at the University of British Columbia, was working as a teaching assistant in 2013 and trying to come up with assignments for his students. Looking through “business as usual” and worst-case scenarios for the emission of carbon dioxide into the atmosphere, he saw that reliance on coal for energy started ramping up around 2040.

“Why is that?” he remembers asking himself.

The question evolved into his dissertation work—and to the most provocative conclusion of his study, published last month to little fanfare in the journal Energy Economics. Inflated coal estimates had become at some point “a virtually unlimited backstop supply [that] has misinformed a generation of long-term energy scenarios,” Ritchie and his co-author, UBC professor Hadi Dowlatabadi, write in their paper. The estimates reflected all geologically identified coal, not the fraction it may be possible to dig out.

In other words, Ritchie and Dowlatabadi found, there may not be enough accessible coal to fuel the worst-case scenario of global warming.

“For the past quarter-century, high emission baselines have been the focus of research, explicitly or implicitly shaping national policy benchmarks, such as estimates for the social cost of carbon,” the paper says, referring to the dollars-per-ton measure used by government and business to factor future climate damage into today’s spending.

That sentence flies pretty close to the white-hot center of the climate policy debate in Washington. Quantifying the “social cost of carbon” is an arduous process that has become a highly politicized issue. Steep costs from capping coal emissions have been baked into policy for years, “and realistically I don’t know if that can hold up anymore, if you take the ‘coal backstop’ out,” said Ritchie, who is doing his Ph.D. work at UBC’s Institute for Resources, Environment and Sustainability.

Coking coal at a mill in Middletown, Ohio, in September 2016. Photo by Luke Sharrett/Bloomberg via Getty Images

The surge in global coal production has produced a much more refined understanding of coal deposits around the world. Armed with those refinements, researchers have slashed their estimates of the amount of economically and technologically recoverable coal by two-thirds from ’90s-era forecasts. When the UBC researchers analyzed the worst-case scenario for 21st century carbon dioxide emissions, using the revised coal estimates, they found that CO2 emissions fell dramatically.

“When I first found all this out, in 2015, it was somewhat of an existential crisis in a way,” Ritchie recalled. “I said, ‘Oh man, am I really right about this?'”

“This” could help the scenario developers rethink what they feed to climate modelers. For its most recent comprehensive review, published in 2013 and 2014, the research community created scenarios of several possible futures for greenhouse gas emissions in this century. Being scientists, they call these models “representative concentration pathways,” or RCPs. Ritchie was most interested in the extreme scenario, RCP 8.5. In a 2011 summary of that pathway, the developers wrote that “coal use in particular increases almost 10 fold by 2100.”

To get to the dark future of RCP 8.5, Ritchie found, you’d have to burn more coal than anyone should expect to be dug up. This pathway for future warming, often considered a business-as-usual scenario, wasn’t likely.

The discovery that there’s a whole lot less coal to burn would seem a gift to skeptics of climate change and opponents of climate policy. But Ritchie’s paper is a double-edged sword. The same finding that shrinks CO2 emissions may also lower the cost of dealing with global warming, making the Paris Agreement that addresses climate change easier to achieve.

The paper’s findings align with real-world trends in reduced coal use, particularly in the U.S. and China, said Gary Yohe, an economics and environmental studies professor at Wesleyan University. The future of coal demand is changing at least as quickly as supply estimates. Because of a growing public outcry in China over the deadly, soot-filled air of many of the nation’s cities, Yohe expects the Chinese government to “leave a lot of coal in the ground that they already know is there.”

“The quotable take on that is it doesn’t matter what Donald Trump says about opening coal mines,” Yohe said. “He’s not going to generate any more jobs for coal miners, because who’s going to open those mines?”

A worker (smoking) in a coal mine in Shanxi, China, in November 2015. Photo by Kevin Frayer/Getty Images

Global leadership on climate change is passing from the U.S. as President Trump unwinds his predecessor’s policies. China’s emissions have either been flat or have dropped by a percentage point every year since 2013. India decided recently that some planned coal plants may not be needed, as the nonprofit Climate Action Tracker said last week.

It all adds up to progress in the climate fight, Yohe said. If Trump were to withdraw the U.S. from the Paris climate accord, it wouldn’t be as devastating to the accord’s goals as it might appear, he said, “because it’s the cities and the states, like California, and businesses all across the country who have already decided they’re going to reduce their carbon footprints.”

To better understand how carbon-emission projections are made, Ritchie undertook the soul-destroying task of reading all five climate-change assessments published since 1990 by the Intergovernmental Panel on Climate Change (IPCC), the authoritative but not bestselling scientific body. That cost him about a month. The work was funded, in part, by the Pacific Institute for Climate Solutions and by National Science Foundation funding awarded through the Carnegie Mellon Climate and Energy Decision Making Center.

Ritchie found that RCP 8.5, created for the most recent report, relies on two-decade-old coal assessments and assumes that within the next 20 years or so, other energy sources will fall away, leaving coal to pick up the slack. Since his work suggests there isn’t enough recoverable coal to bring about that grisly world, how would future energy demand be satisfied?

By natural gas, for one. If it makes up the difference, emissions projected in the RCP 8.5 scenario would fall by 15 percent. If clean energy makes up that demand, emissions would be 30 percent lower, Ritchie and Dowlatabadi write.

These charts show the effect that revised coal estimates might have on the worst-case global CO2 emissions scenario. The top chart shows a worst-case scenario, in which coal-burning increases throughout the 21st century. The bottom chart shows projections with revised, diminished coal-reserve estimates. Figures to the right of the lower chart show how gas and renewables could meet future energy demand that is currently assumed to be met by coal consumption. SOURCE: Justin Ritchie; Elsevier journal Energy Economics

Which brings us back to the conclusion Ritchie fears some will draw, and makes it crucial to understand two things.

First, the findings don’t change greenhouse-gas physics or even the likeliest projections of global warming. If his research proves valuable to others, Ritchie said, it might just push more attention to the next-most-severe CO2 pathway, RCP 6.0. That world isn’t one anybody would want to live in, either, even though it may be the one we’re setting course for.

Second, there are plenty of ways to keep the carbon burning without coal. Even if Ritchie and Dowlatabadi are right, we may get slammed by something like an RCP 8.5, said Noah Kaufman, a climate economist at the World Resources Institute. “This seems like a plausible emissions pathway to consider,” he said, “and perhaps the heavy use of coal is just a proxy for advances in high-carbon technologies that will enable this pathway,” such as tar sands or frozen methane sheets in the ocean called hydrates.

If there’s one thing fossil-fuel companies have proved to be amazing at, it’s discovering fossil fuels.

Coal mounds at a Texas generating station. Photo by Luke Sharrett/Bloomberg via Getty Images

Emissions have been holding steady over the past three years. But there’s a world of difference between a halt in the rate of emissions growth and the end of emissions. Coal or no coal, virtually everybody everywhere is still getting up every morning and spending what scientists call our “carbon budget.” We might bust it within the next 20 years.

“Even the low-end climate scenarios (e.g. RCP 2.6) would entail significant and widespread climate impacts, so we don’t need to invoke the worst case (extremely high coal) scenarios to know that the world is in serious trouble if coal burning continues unabated,” Pushker Kharecha, a climate scientist at Columbia University’s Earth Institute, wrote in an email. He noted that he hadn’t yet reviewed the paper’s methods and conclusions carefully.

Ritchie isn’t saying we’re about to stop burning coal, or that we’re about to run out of it. He’s just come up with a bullish case for coal burning that may be more realistic than the 1990s bullish case for coal burning.

Before Energy Economics published the study, Ritchie said, he had submitted multiple papers to multiple journals. “Despite getting over 30 peer reviews collected from all of these journals, no one has shot it down,” he said, adding that he still has detected a reluctance among some scholars to grapple with his observations.

“Maybe I’m completely wrong about all of this, and here I’ve written all these papers and there’s some critical flaws in them. That’s great—tell me about it,” Ritchie said. “Please! Someone just read it!”

Despite all of the attention given to wind and solar power, the development and deployment of advanced coal technologies may be far more important in shaping our energy future. Consider where world energy use and research is headed. Coal, and other fossil fuels, remain the backbone of the global energy system and will remain so for the foreseeable future.

If the politics of coal have never seemed so anguished, the economic prospects of advanced coal technologies with higher generating efficiencies have never seemed so promising. Not so far into the future, several new coal technologies are expected to come into greater commercial use in the United States. The best known are new pulverized coal combustion systems, operating at increasingly higher temperatures and pressures, and plants with an integrated gasification combined cycle. Increasing the average efficiency rate of the U.S. coal fleet from 33 to 40 percent using these available technologies would reduce coal-plant emissions by between 14 and 21 percent.

And there may yet be cost-cutting breakthroughs in the development of techniques to capture carbon emissions from power plants – both coal and natural gas units — and use the carbon to produce petrochemicals, plastics and other useful products. Researchers at the Massachusetts Institute of Technology and other leading universities are trying to come up with the answers.

Global warming will continue unless all countries reduce carbon emissions. That’s because most countries burn coal, which is responsible for about 45 percent of the world’s carbon emissions. The U.S. Energy Information Administration projects that even as coal’s share of U.S. electricity generating capacity declines, its world use will rise from about 30 percent today to 50 percent by 2035.

 Its environmental impact notwithstanding, coal is a practical energy option for fast-growing economies like China and India, which don’t have large natural gas resources. These countries are determined to grow their economies and lift millions of people out of poverty, and do it at the least cost possible.
Given the certainty that coal will continue to play a large and indispensable role in electricity production, the way forward requires the deployment of innovative coal technologies to mitigate carbon emissions.

The World Coal Association says that lifting the average global efficiency rate of coal plants to 40 percent compared to 33 percent today would reduce carbon output by an amount equal to India’s annual carbon emissions, which are among the highest in the world. Some coal plants operating with ultra-supercritical technology in Europe and Japan are already achieving efficiencies in the 42 to 46 percent range.

Importantly, higher efficiencies are a critical step toward the use of carbon capture, use and storage technology, without which, it is highly improbable that global carbon emissions can be brought down to acceptable levels.

Source:

India aims to auction coal blocks for commercial mining by end- December, coal secretary Susheel Kumar told television channel ET NOW on Thursday, a move that would end monopoly of state-run firms in coal mining.

This could help the country to meet its target and produce 1 billion tonnes by 2020.

Coal accounts for about 70% of India’s power generation, and the government wants to boost domestic output to cut imports.

Despite environmental worries, India plans to continue to depend on burning coal to provide power for a population of 1.3 billion.

Indian coal companies have pithead stock – coal mined, but not supplied – of 69 million tonnes, Kumar said, adding Coal India Ltd does not need to produce more.

 

Source: HindustanTimes

South Korean power generators are putting into action their stated plan to book more US thermal coal with approximately 1.5 million mt destined to arrive at Korean ports between July and September, said a market source Wednesday.

All five Korean power utilities have purchased US thermal coal cargoes for Q3 delivery, and the specification of the coal involved is understood to be 4,850 kcal/kg NAR, said one source familiar with the matter.

The shipments are coming from a port on the western seaboard of Canada, possibly Vancouver which is home to the Westshore coal terminal, said the source.

One motivation for Korean utilities to take more US thermal coal is relatively high prices of similar calorific value Indonesian thermal coal, which have fluctuated widely since late last year.

Indonesian 5,000 kcal/kg GAR grade coal was trading at $63/mt FOB Kalimantan on a 90-day basis this week, and peaked at $77/mt in mid-November 2015, according to S&P Global Platts data.

US thermal coal on a 8,800 Btu/lb GAR basis, which is equivalent to 4,880 kcal/kg NAR was trading Tuesday at $56.16/mt FOB Vancouver, according to Platts prices.

For the quickest route to Korea, across the Pacific Ocean, current Panamax cargo freight from Vancouver to Japan is $10.70/mt, indicating a delivered Japan price of about $66.90/mt CFR for US 4,850 kcal/kg NAR thermal coal.

US thermal coal can be blended with other origins, particularly higher grades from Australia and Indonesia, according to the specifications of Korean power plants, sources said.

CONSUMPTION TAX

Another spur to Korean buying of US 4,850 kcal/kg NAR thermal coal is the pending April 1 increase of Won 6,000 ($5.33/mt) in the Korean government’s consumption tax on imported thermal coal, said the market source.

“US thermal coal below 5,000 kcal/kg NAR will attract the lowest [rate of] consumption tax,” said another market source.

US thermal coal with a calorific value of 4,850 kcal/kg NAR would fit into the lowest tier of the Korean government’s consumption tax which applies to imported coal under 5,000 kcal/kg NAR, he said.

For the lowest band, the consumption tax rate is changing to Won 27,000/mt post-April 1, from Won 21,000/mt, currently.

Thermal coal ranging from 5,000 to 5,500 kcal/kg NAR attracts a higher rate of consumption tax at Won 30,000/mt from April 1, up from Won 24,000/mt at present.

And, for the upper band of the consumption tax which applies to imported thermal coal higher than 5,500 kcal/kg NAR the rate is Won 33,000/mt from April, rising from Won 27,000/mt now.

Sources close to the Korean market flagged in January that a significant quantity of US thermal coal was expected to be delivered to the Northeast Asian country later in the year.

One cargo of US thermal coal that arrived in Korea in January is understood to have traveled from a US port on the Gulf of Mexico via the Atlantic and Indian Oceans, said another market source in Korea.

Korean power companies have freight agreements that provide vessels on a long-term basis at fixed prices, providing an incentive to send ships on long voyages to Colombia or the US, sources said.

Two US coal producers with mines in the vast Powder River Basin covering the US states of Montana and Wyoming are known to have served the Korean market in the past few years, but their shipments have tailed off in recent months.

One is Signal Peak Energy — partly owned by commodities trading company Gunvor — that produces bituminous thermal coal in Montana, and ships exports via Canada’s Westshore terminal.

And the other is Wyoming-headquartered Cloud Peak Energy which produces sub-bituminous coal for customers in the US and Asia, according to the company’s website.

Korea imported 1.05 million mt of US bituminous thermal coal in the 2016 year, according to Platts data.

For the 2015 year, Korean imports were 670,000 mt for US bituminous thermal coal and 555,000 mt for US sub-bituminous thermal coal, said the data.

Source: www.platts.com