Guest post by David Middleton
Coal prices are on the rise again. With benchmark rates in Australia up over 30 percent since July — approaching the $100/t mark that prevailed in November 2016 after a massive run-up last year.
And a number of events the past week show that things could get even more heated in coal over the coming months.
The biggest story recently has been China. Where a push to restrict coal imports has driven local prices to multi-year highs. With data this week from Platts showing that 102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads.
[…]
And China isn’t the only place where demand is going up. With South Korea also seeing record coal imports of late — bringing in an all-time high 11.3 million tonnes in September, with October imports expected to set a fresh record at 12 million tonnes.
That’s reportedly coming as new coal-fired plants start up, and Korean nuclear plants experience downtime. Meaning Korean users are scrambling for supplies — even as mine output may be about to take a hit.
[…]
That threat of lost supply — and rising global demand — is all coming just as new and significant players are entering the coal space. Such as Bangladesh: where state minerals firm Petrobangla said this week it is looking at buying stakes in coal mines in South Africa, Australia and Indonesia.
Petrobangla’s stated goal is to acquire captive supply for export back to Bangladesh’s surging coal-fired power sector. Which would mean one more mouth to feed at a time when supply and prices are getting extremely tight.
Watch for ongoing import numbers in China and Korea, and for South African strike announcements and Bangladesh deals.
By Dave Forest
What could be even better than “soaring” coal prices? The resurgence of the American coal industry and surging U.S. coal exports!
Why are U.S. coal exports surging? The end of the War on Coal is one factor… But the fact that U.S. coal prices are far less than the $100/t level.
Even better news for coal: Despite the surge in prices, coal is still highly competitive with natural gas (~$3/mmbtu) in these nominally United States…
To paraphrase the great Samuel Clemens “The reports of coal’s death are greatly exaggerated.”
With Tesla and EV’s floundering and coal surging… What on Earth can save us from Gorebal Warming? (wink-wink-nudge-nudge)
And U.S. shale oil exports are rising…..
https://finance.yahoo.com/news/continental-resources-reports-sale-1-201800416.html
Ol’ King Coal was a merry old soul…
I´m sure China is buying all of that coal so they can sequester it in some safe place and help save us all from Hell On Earth, which that nut-job Trump seems dedicated to achieving. What? THEY ARE GOING TO BURN IT IN ELECTRIC-GENERATING PLANTS? There is some kind of collusion with Trump? Help me!
all this shows is the US is well placed to take advantage of temporary shortages…
These aren’t new and increasing markets.
US home power market still declining (no new plant announced since Trump came in… 12 closures announced)
SA mentioned – but not that SA courts halted plans for new coal plant…
I have my doubts about whether Bangladesh will fund/approve the 23 GW of coal it has announced.
https://www.platts.com/latest-news/coal/singapore/chinas-sep-coal-imports-rise-11-on-year-to-2708-26820700
“Yet, coal demand should weaken by the end of the year due to environmental crackdowns on industrial activities and supply cuts in steel production,” the analysts said. “This could in part ease tightened market and lessen demand for coal imports by the end of the year.”
so they can sequester it
===============
what a concept. bury coal in the ground and call it CCS. bypass. the burning step altogether which makes CCS so problematic.
1 ton of coal makes almost 4 tons of co2. so if the price of carbon credits gets much above $25 a ton you can make money buying coal at $100 a ton and burying it in the ground.
One of the funnier stories about Coal in Australia was the NSW Government selling the Vales Point Power Station for $1M AUD. You can read what happened next
http://www.abc.net.au/news/2017-10-24/coal-power-station-sold-for-peanuts-becomes-730-million-asset/9077582
The investors walked away with $40M each for the first year of operation and a valuation of $730M and a supply shortage to make buckets more in for the next couple of years.
What a debacle.
Just hoping Soros is still holding some of his short positions on coal, he expected Hill-o-beans to win and was playing this one pretty hard.
Coal is great
Coal is cool
And we thank it for our fuel.
Frankly I don’t believe the numbers on the EIA page are meaningful. When you flip over to the $/MWh page you have Powder River Basin coal coming in at 1/3 the cost of Natural Gas. And yet you have new natural gas capacity coming online in ERCOT while PRB coal is shutting down. I am pretty sure that if the cost of coal went to $0/ton you would still have coal shutting down due to the higher labor and compliance cost of coal plants.
Yes we might make some money selling coal overseas, but we sure aren’t digging much more out of the ground
https://www.aar.org/data-center/rail-traffic-data
” in these nominally United States…” Nice slip,David <:)
Actually feel a small bit sorry for the blog pet alarmist Griff here. This would appear to be truly desperate news indeed. It is entirely possible that Trump can begin making significant inroads into the only real legacy Obama left which was massive and pointless national debt. Trump can at least potentially do this by heavily exploiting US fossil carbon reserves while the planet naturally cools or remains thermally paused via. oceanic and solar cycles. A ghastly concept for Griff but a properly funny prospect for the most of the blog regulars.
And as long as we didn’t burn it, but a developing or third world country does, the carbon doesn’t count under greenieaccounting roolz. Win-win.
Rising oil prices from rising global economic growth will speed up all commodity markets and trade flows.
The fact that the profits of the coal industry will increase in 2017, however, must be due to increased production and increased consumption. So much the prices have not risen compared to 2016. Maybe you should disregard all statistics until the end of 2016 (Obama time) and turn to 2017.
So far, however, coal production in the first half of 2017 has been rising for the first time since 2014. It is clear that an idle coal production can not reach the figures of earlier years, the workers who have been laid off are missing. There are no buyers, which need to be recaptured. Even machinery has been thinned out and need to be bought again. This takes time, but the signs of the new Trump policy towards coal are obvious.
“US coal production totaled 187.1 million short tons during second quarter of 2017. This was 5.1% lower than the previous quarter and 16.6% higher than second quarter 2016. Production in the Western Region, which represents about 53.1% of total US coal production in second quarter of 2017, totaled about 99.4 million short tons (19.7% higher than second quarter 2016). ”
https://www.eia.gov/coal/production/quarterly/
Uh-oh, now along with coal trains of death we’ll have coal ships of death.
That can’t be good.
“102 coal-laden boats are currently anchored offshore of Chinese ports, unable to deliver their loads.” Because demand is so high, that prices shot up and nobody can afford to buy it, driving the demand even higher. A classical definition of a bubble.
But the MSM told me that coal is on the way of the dinosaur and soon the whole world would be powered by plausible, scalable green energy sources like weather vanes and potato batteries. I’m confused…
Did anyone hear notice all the US coal information was from 2016 to pressent. Yes the article says it is goiing up in the last year. But US coal is now at a 30 year low in production.
https://wolfstreet.com/2016/06/13/why-us-coal-production-collapsed-to-lowest-level-since-1981/
I think electing Trump released a pent up demand for coal. Renewables were already proving to be a bust and the world needed “permission” to make the only move that had come to make sense, but dared not be mentioned by name.
The beautiful irony is that the world is pressing on with EVs as a proxy for saving the planet now that failing renewables are beginning to have life sustaining subsidies cut (sauve qui peut), and they’ll be powered by coal and natural gas fired electrical.
“It will all end in tears”, comes to the mind of the Greenies and Warmistas as they see the rise and rise of Old King Coal.
The export market for US coal has always been under-estimated. Greens try to block port loading facilities for coal – once again relegating the poor of the world to energy starvation.
Looking at the price of coal and gas without looking at demand for electricity can be misleading.Two things affect demand, the economy and weather.
Generating cost is the product of fuel price and heat rate (efficiency). The lowest generating cost plant comes on line first, then the second and so.
So when demand is low, natural gas prices are low. Newer efficient CCGT take market share from coal in the US. However, when demand is high the price of natural gas increases and the coal plants become the lower generating cost. Market share for coal increases.
This does not hurt the gas plants because they are still needed because of the higher demand.
On nice spring and fall days when demand is low, the Griffs of the world will brag about how good renewable are based on market share.
The test of the market comes on really ugly days of high demand. Even the oldest dirtiest coal plant is running flat out.
The not in my term of office politicians run on a campaign of closing coal plants. After elected the power company tells the politician how any will die without the coal plant. If the politician wants to get elected again they make a deal to close the plant in 20 years.
There are technologies that can burn coal cleaner. Reducing the Mercury and fly ash, among other particuletes .A well tuned boiler also allows it to run at it designed parameters. Its like a cars engine running properly. Fuel Tech.
And what was the EPA Clean Power Plan supposed to accomplish? A 32% reduction in CO2 output from US power generation (not just coal). The US is responsible for about 16% of the world’s CO2 output. Power generation represents about 31% of US CO2 production. Therefore – 16% * 31% * 32% = 1.6%. CPP will reduce the global CO2 output by 1.6%.
China and India will cancel that out with their next dozen coal fired power plants.
Screw up the entire power industry, increase the price of electricity and not remotely solve the imaginary climate change problem. Nothing but political posturing! Wasting resources on a pointless exercise is truly harmful to the environment.
BTW since the utilities have been retiring older inefficient coal fired generators with more efficient combined cycle designs power generation’s share of CO2 is now less than that of the transportation sector.
As Carl Sagan observed, we have been bamboozled, hustled, conned by those wishing to steal and waste our money and rob us of our liberties. Hardly a new agenda.
http://writerbeat.com/articles/14306-Greenhouse—We-don-t-need-no-stinkin-greenhouse-Warning-science-ahead-
http://writerbeat.com/articles/15582-To-be-33C-or-not-to-be-33C