Latest news with #thermalcoal
Bloomberg
6 days ago
- Business
- Bloomberg
China Likely to Ditch Low-Grade Coal From Indonesia Due to Glut
China is likely to cut imports of the lowest grades of coal as a glut of the fuel makes the trade uneconomic and the government tightens up on carbon emissions. It's a move that would weigh most heavily on suppliers in Indonesia. China's benchmark price of thermal coal has slumped to a four-year low, a product of record domestic production and a binge on imports in recent years. Power demand hasn't kept up as the economy has slowed, while renewables are shouldering more of the burden of electricity generation.
Reuters
06-06-2025
- Business
- Reuters
China and India lead modest revival in Asia thermal coal imports: Russell
LAUNCESTON, Australia, June 6 (Reuters) - There are some tentative early signs that weak thermal coal prices are starting to boost import demand among Asia's heavyweight buyers China and India. Asia's seaborne imports of the fuel used mainly to generate electricity rose to a five-month high of 74.12 million metric tons in May, according to data compiled by commodity analysts Kpler. This was up from 68.56 million tons in April, although it was still below the 78.30 million tons from May 2024. For the first five months of the year Asia's imports of seaborne thermal coal were 346.96 million tons, down 7.0% from the same period in 2024. The decline was largely been driven by weaker demand from China and India, the world's two biggest importers of coal. China's seaborne imports of thermal coal were 116.62 million tons in the January-May period, down 13.6% from the same period in 2024, while India's were 71.07 million, a decline of 4.7%. China's appetite for seaborne coal has waned so far in 2025 after reaching a record in 2024, as strong domestic output and higher hydropower and renewable energy curbed coal-fired generation. The latest available data showed China produced 389.31 million tons in April, up 3.8% from the year-earlier month, while output for the first four months of the year was 1.58 billion tons, up 6.6%. India's domestic coal production has also been trending higher, with official data showing output of 86.24 million tons in May, up from 83.96 million in the same month last year. Asia's seaborne coal prices have been sliding in response to the higher domestic output in China and India, with grades from both top exporters Indonesia and Australia hitting four-year lows. Indonesian coal with an energy content of 4,200 kilocalories per kilogram (kcal/kg), as assessed by commodity price reporting agency Argus, dropped to $46.20 a ton in the week to May 30, down from $47.46 the prior week and the lowest since April 2021. The grade , which is favoured by both Chinese and Indian buyers, has been trending lower since October 2023, and is now down 25% over that time period. Australian coal with an energy content of 5,500 kcal/kg dropped to $66.84 a ton in the week to May 30, the lowest since late May 2021 and a drop of 37% from October 2023, when it started its current downtrend. This grade is largely favoured by Chinese buyers, as utilities in Japan and South Korea prefer higher quality coal. Certainly China's imports of Australian thermal coal have ticked up in recent months, with Kpler data showing arrivals of 6.39 million tons in May and 7.01 million in April, up from the 4.17 million In March and February's 3.63 million. It's possible that China's import demand is responding to the lower seaborne prices, and there is also the seasonal pattern of higher imports as the summer peak for electricity consumption comes closer. India's imports of thermal coal rose to 17.84 million tons in May, up from 15.31 million in April and the strongest month since October 2023. The gain in May arrivals was largely due to increased imports from Indonesia, which supplied 10.24 million tons, the most since May last year. It's also worth noting that India's imports of Russian thermal coal reached a two-year high of 1.39 million tons in May, according to Kpler, rising from 1.14 million in April. They had not been above the 1 million tons per month level since June 2023, and the recent increase has largely been shipped from Russia's Pacific ports, rather than from those in Europe. This suggests that Russian coal in the Pacific is once again becoming price-competitive against Australian grades, and McCloskey World Coal's assessment of 6,700 kcal/kg fuel at Vostochny port does support this view. Russian coal was assessed at $73.26 a ton in the fortnight to June 2, up from the 54-month low of $68.13 the prior two-week period. Once adjusted for energy content differences and freight, it's likely that Russian and Australian cargoes are very closely matched for Indian buyers. The overall picture for seaborne thermal coal in Asia is that the declining prices may finally be leading to some uptick in demand, but it's also likely that low prices will have to persist to keep importers interested. The views expressed here are those of the author, a columnist for Reuters.
Reuters
30-05-2025
- Business
- Reuters
Natural gas bulls should bemoan Indonesia's coal export blues: Maguire
LITTLETON, Colorado, May 30 (Reuters) - Developers and exporters of natural gas should be alarmed by the dour state of thermal coal exports coming out of Indonesia. The world's largest thermal coal exporter is on course for a rare decline in annual sales after shipping out the smallest tonnage in three years during the opening five months of 2025. To combat declining sales, regional coal traders have cut export prices to their lowest in four years, which in turn are reducing the cost of coal-fired power production across Asia. That's bad news for natural gas bulls, who eye Asia as their main potential growth market but are already struggling to displace cheaper coal from power systems across the region. Indonesian coal sales to the two largest coal consumers - China and India - dropped by 23% and 14% respectively so far this year as coal miners in those countries lifted domestic output and reduced demand for imports. Indonesia exported just under 188 million metric tons of coal used for power generation during January to May, according to commodities trade intelligence firm Kpler. That total was 12% or around 25 million tons less than during the same months in 2024, and was the lowest for that period since 2022. Sales to top market China are down by 23% or by 20 million tons compared to January to May 2024, while sales to India were 14% or 6.5 million tons lower. As China and India have historically accounted for two-thirds of all Indonesian coal exports, exporters are attempting to replace those lost volumes with sales to other markets. However, the soft state of global consumer demand and manufacturing activity has also cooled demand for industrial power fuels in other major coal import markets, including South Korea, Japan, Taiwan and the Philippines. Indeed, eight of the ten largest markets for Indonesian coal have registered year-over-year declines in imports so far in 2025. To combat the declining sales, coal traders in Indonesia, Australia, Colombia, South Africa and Russia have all cut prices this month, with many key international coal benchmarks currently trading at over four-year lows. As Asia's power system already relies on coal for over half of all electricity supplies, cheaper coal prices look set to deepen the region's reliance on the fuel for power, especially while economic and business profit growth remain subdued. Cheaper coal prices also serve to undermine the appeal of constructing new natural gas-fired power plants in the region, especially in areas where new solar capacity can be brought online more quickly to help boost near-term power supplies. Natural gas plants currently produce around 10% of Asia's utility-supplied electricity, according to Ember, fed by around 912 gigawatts (GW) of regional gas-fired generation capacity, data from Global Energy Monitor (GEM) shows. Gas market bulls have high hopes that more gas generation capacity will be built in Asia. Two-thirds of all new global gas power capacity currently under construction is taking place within the continent, GEM data shows. An additional 61% of gas projects in so-called pre-construction - where deals have been proposed but capital and sites have yet to be secured - are also in Asia. Most, if not all, of the gas projects currently under construction are expected to come online, especially the roughly 53 GW of new capacity in China and Taiwan where outdated coal-fired capacity is expected to be replaced by newer gas plants. Singapore and South Korea have a further 7 GW in the construction phase, which should bode well for international gas export potential as both those countries are gas importers. However, it is not yet clear how much more gas generation capacity will be built elsewhere in Asia, especially in countries such as Indonesia and the Philippines where there are limited government funds available for large energy investments. Both Indonesia and the Philippines have also been hit by gas project delays in recent years which are serving to undermine commercial support for new gas projects, especially when solar capacity has been brought online more quickly. The speed of cost reductions of solar generation and battery storage systems also cloud the outlook for gas power projects that are not yet under construction, especially in countries with strong social support for reducing fossil fuel reliance. For exporters of natural gas and LNG, the combination of project delays and development uncertainty is already serving to postpone potential export volume growth by years and is placing pressure on near-term LNG export prices in key markets. And with coal prices now lingering near multi-year lows, that could be enough to change the tune of many gas market bulls. The opinions expressed here are those of the author, a columnist for Reuters.
Bloomberg
27-05-2025
- Business
- Bloomberg
Buyers of Indonesian Coal Claim Local Index Is Distorting Prices
A group of energy traders handling more than a 10th of Indonesia's thermal coal exports are calling for the replacement of a local index that they say is pushing prices above actual market levels. The Coalindo Index, which makes up half of the weighting of the Indonesian Coal Index, has been out of line with other gauges for months, according to senior executives at four commodity trading houses that asked not to be named due to the sensitivity of the matter. Overseas demand for Indonesian coal will drop if the situation persists, they said.
Reuters
09-05-2025
- Business
- Reuters
Indonesia coal exports post rare decline so far in 2025: Maguire
LITTLETON, Colorado, May 9 (Reuters) - Indonesia's exports of thermal coal have dropped to their lowest in three years so far in 2025, dented by weak demand in China and India - the world's two largest coal consumers. The world's largest exporter of coal for power generation shipped out 150 million tons of thermal coal over the first four months of 2025, according to data from commodities intelligence firm Kpler. That was 12%, or nearly 20 million tons, less than what was shipped during the same months in 2024, and marked the biggest year-on-year decline in data going back to the start of 2017. As Indonesia accounts for roughly half of all thermal coal exports, the lower Indonesian shipments have dragged global thermal coal exports lower too, by 7%, or 23 million tons, from January through April compared with the same months a year ago. If the relatively weak pace of coal exports is sustained over the rest of the year, 2025 could mark the first annual decline in Indonesian coal exports since 2020, when the country's coal output and shipments were stalled by COVID-19. Weaker coal import demand from China and India were the main drags on Indonesia's coal exports. China - by far the world's largest coal producer, consumer and importer - cut its purchases from Indonesia by 14 million tons, or 20%, during January to April from the same period last year. Beijing's greater emphasis on boosting local coal mine output, alongside ongoing efforts to reduce air pollution, have been the key drivers behind China's reduced import appetite. World No.2 coal consumer India is also on a domestic coal output push, and reduced imports of Indonesian coal by 15%, or by 6 million tons, during January to April from the same months in 2024. Beyond China and India, other historically large coal importers have also reduced Indonesian coal imports this year. Japan and South Korea imported a total of 13 million tons of coal from Indonesia during January to April, compared to 17 million tons during the same months in 2024. Taiwan, Thailand, the Philippines, Malaysia and Pakistan all also registered declines in year-to-date coal imports from Indonesia. Ongoing efforts to reduce coal use in power production, and the increased generation from clean energy sources instead, has likely helped trim coal demand across Asia so far this year, and could trigger further declines in coal purchases going forward. Over the first quarter of 2025, coal-fired electricity production across Asia was down 3% from the same months in 2024, data from think tank Ember shows. However, the weak state of China's industrial economy - which has direct links to trade partners across the region - has also likely played a role in curbing Asia's overall coal use. Weaker Chinese activity throughout its construction sector and heavy industries will have had knock-on effects along its supply chains, which span borders and will have chilled energy-intensive activity in neighbouring nations as well. And with most of Asia's manufacturing sector now set to take a hit from the new higher trade tariffs set by U.S. President Donald Trump, overall industrial activity - and demand for coal power - could decline further in the months ahead. That said, if Asian economies opt to deploy stimulus measures designed to counter the impact of U.S. trade barriers, then greater industrial energy use could result, which could spark a rebound in coal imports and consumption. Not all major coal users have curbed coal consumption and imports so far this year. Vietnam and Bangladesh both lifted Indonesian coal imports to record highs during January to April, and look set to continue boosting coal use and imports going forward to feed their fast-growing energy systems. Other, more developed economies have also stepped up coal imports, in part due to a sharp run-up this year in the price of natural gas, which is another major source of power production in many areas. Spain, Italy, Romania and New Zealand all registered year-over-year rises in imports of Indonesian coal, and higher coal-fired power output. Even the United States has boosted coal-fired electricity output this year by over 20% from year-before levels, Ember data shows. That offers little help to Indonesian coal exporters, however, as the U.S. is a fellow coal exporter. And with China and India both likely to remain only modest coal importers over the coming months, the recent weak pace of Indonesia's coal shipments looks set to be maintained for the near term at least. That in turn raises the prospect of a rare full-year contraction in Indonesia's coal shipments, and a possible peak in global coal export flows.
