Prices of thermal coal exports from the port of Newcastle (Australia) have risen 20% since mid-May and is now at its highest since April due to mining coal mine in Australia in trouble as scarcity of supply in the context demand in the northern hemisphere are in peak season.
Too much rain in China force it to tighten operations hydroelectric generators also reduces the power capacity in this market, including hydroelectric plant the world’s largest, forcing the industry to increase production capacity of heat to compensate for power shortages.
Recent weeks have coal market became scarce, causing coal prices at Newcastle Spot – a reference to the entire Asian market – up 18% to 84.20 USD / ton, the highest level since 20/4.
Deutsche Bank said the coal price increase is also due to many other factors, including the issue pits related to the weather in the coal mine in Indonesia (heavy rains and floods) and South Africa (bad weather caused difficult towels for the loading and unloading of coal at Richards Bay port), as well as the strike of the workers in the Hunter Valley coal (Australia) in June to reduce output in the month.
In China, heavy rains caused the largest hydroelectric plant in the world – the Three Gorges Dam, with a capacity of about 20,000 megawatts – to cut 6,000 MW pressurized water to reduce flood discharge. Other dams were also affected, with a total capacity of 13,000 MW hydropower dropped by. Merchants calculated that that figure equivalent capacity of about 12 power plants using fossil fuels or nuclear power plant.
Last year heavy rains also pushed coal prices rose sharply, the right time limited China coal mine dry, forcing power plants to increased dependence on imported coal to meet demand.
Weather data shows that rainfall in most areas in the south, southeast, east and central China was far ahead of the same time last year. These areas are concentrated most hydroelectric dams across the country.
Meanwhile, in the northern provinces of the country, the weather was unusually hot and dry, making the demand for electricity increases.
However, in the distant future, coal prices forecast to fall by supply will be plentiful.
“Recent price increases can coal will not last long because the coal market in 2017 has already become balanced supply – demand than last year,” Deutsche said.
Third largest coal consumer in the world – China, US and India – has increased coal mining in 2017 after the global coal output in 2016 decreased dramatically.
Recently, the British energy company BP said the global coal mining in 2016 decreased by 6.5%, the decline unprecedented in history. China and the United States contribute half of the total decline, while production in India increased.
But this year the situation is completely different. Only in the first 5 months of 2017, the output of the 3 countries has increased less nhatgs 121 million tonnes, or 6% over the same period last year. Which is the largest increase in the US with 19%, according to data from the US Energy Department.
Cause by the policy change in China, changes in the energy market and the Indian American policy continues to provide power to the poor.
Things are changing very fast. Only recently, BP said in 2016 the demand for coal in the US fell by 33.4 million tons of oil to 258.4 million tonnes – an unprecedented level since the 1970s; Consumption in China – the country use the most energy in the world – also the lowest in 6 years. 2016 coal consumption decreased in every continent except Africa.
The information is the basis for the forecast of coal market outlook is very mixed. Recently, the Chinese government announced that it will not allow the import of coal from the small port since 1/7, moves to tighten supplies in the summer to push coal prices higher. Coke futures price futures in China has increased by nearly 8% on the date 06.29.2017, before the policy takes effect.
And last 21/6 days, Coal India, the largest coal producer in the world, said it is closing 37 coal mines and will end in March this year after citing coal mining no longer bring effective economic competition by coal increasingly fierce with other types of renewable energy.
China has pledged to cut greenhouse gas emissions in 2030 and last year has closed hundreds of unsafe coal mines, and mining operations forcing the operators to reduce hours. All aimed at reducing coal supply and pull up prices, although current Chinese government has relaxed this policy and thus production is recovering.
However, NYTimes recently reported that although China has abandoned plans to build more than 100 power plants new this year, but the company it is building or planning to build 700 power plants new around the world, including in China. The source also said that the new data on production activities thermoelectric shows the “picture” is very different: The energy company China will account for nearly half the total capacity of new thermal power is expected to come into operation over the next decade.