In and prices increased due to supply-side restrictions in China as well as increasing demand. In the first eight months of , thermal coal prices declined due to increased supply in the seaborne thermal coal market as producers reacted to higher prices in In addition, demand was dampened by weaker electricity demand and lower LNG prices. Import restrictions in China in the fourth-quarter added pressure to coal prices. Spot prices for thermal coal were stable in the first-quarter , despite a plunge in oil and gas prices.
The lockdown in China led to a decline in electricity consumption and industrial output, but also to an increase in seaborne imports due to a reduction in domestic production as miners were unable to get to their workplaces and mines were closed as part of the containment measures.
This shifted in April, as prices for thermal coal fell sharply reaching the levels of early as a result of the global decline in demand and the simultaneous recovery of coal production in China. Import quotas in China have also pushed international coal prices down by depressing demand. At the end of the third-quarter , prices started to recover as demand beyond China picked up and the supply side adjustments had cut production.
Coking coal prices slipped in mid due to slowing global economic growth and weak steel production outside of China, notably in India. Spot prices for coking coal rose in the first-quarter On the supply side, a roof collapse at the Moranbah North mine in Queensland and bad weather in Australia also supported higher spot prices.
At the end of the third-quarter, coking coal prices saw an uptick as demand from steelmakers outside of China increased production. Forecasts of heavy rain in Queensland also supported higher prices, but the difficulties of Australian coal in Chinese customs have pushed prices down. The coal price spread between Europe and Asia has widened since While prices in the Asia Pacific region are supported by robust growth in demand, coal demand in Europe is waning.
Lower prices in Europe were driven by falling demand due to low natural gas prices and policies to reduce coal use in Europe. The correlation between both prices is getting weaker. European coal imports in originated mainly from Russia and Colombia. Since exports to the Pacific Basin are more costly for Colombian producers and exports from Russia to the Asia Pacific region are constrained by transport infrastructure limitations, arbitrage opportunities arising from the price spread between the Atlantic Basin and the Pacific Basin cannot be fully exploited by producers.
Therefore price spreads persisted. A wide spread between prices in Europe and Asia was apparent at the start of As demand around the world plummeted so did prices in both regions. However, while prices in Asia remained on low levels in the middle of , prices in the Atlantic Basin picked up in June as supply adjustments in Colombia and the United States were bigger than in Asia.
In that moment, cheap freight rates enable exporters to exploit arbitrage opportunities between the markets, which supports price convergence. In , prices for thermal coal in the Pacific Basin seaborne market were systematically lower than domestic prices in China. Imports into China have been restricted by government policies for a few years.
The most recent policy, according to market participants, is the establishment of import quotas. The exact terms of the policy or the volume amount of the quotas are not disclosed by official sources. Some ships, in particular those bringing coal from Australia, have experienced customs delays which increase costs and demurrage. The price level aims to ensure sufficient profitability for domestic coal producers and customers.
But by restricting imports, the spread between domestic and international prices has become wider in recent months. After the spread declined in first-quarter , the spread continued to grow in the second-quarter, when restrictions were expanded. While the Australian price remained at a low level after declining in April, the domestic price recovery started in China.
The economic recovery in China led to a reduction of stockpiles as power demand recovered but subsequently, due to tightened import restrictions, the reduced demand for foreign imported coal led to a decoupling between domestic and seaborne prices.
The restrictions led to additional pressure on seaborne prices, as the continuing low demand outside China was accompanied by a further reduction in sales opportunities to China. The price spread indicates arbitrage opportunities for Chinese traders, which were not able to be exploited due to the import restrictions. This increases the pressure on policy makers in China, which have to balance the support of domestic production against the economic attractiveness of lower import prices.
Thermal coal, traded in the Pacific Basin, can be categorised by its calorific value CV. Although there is a potential for substitution between the various qualities of coal, the differences represent separate market segments. The biggest importers for Indonesian coal are China and India.
Department of Energy. This is the levelized cost, which includes the cost to build, operate, fuel and maintain a power plant. Berkeley Lab conducts scientific research on behalf of the U. For reference, the average U. The rise of fracking has produced a natural gas boom in the USA. Though less polluting than coal, it's still a fossil fuel, and burning it pumps carbon dioxide into the atmosphere. Wind and solar power are becoming competitive with natural gas in many cases and are likely to grow even more competitive.
Even with federal subsidies for wind and solar power generation being phased out, they are increasingly one of, if not the most, cost-efficient options for utilities. Regulators are beginning to agree. In April, the Indiana Utility Regulatory Commission rejected a proposal by Vectren, an energy company, to build a natural gas-fuel power plant to replace an aging coal-burning generating station. Can you imagine one hundred million years?
Into bark, twigs, stems. Because plants eat light, in much the way we eat food. But then the plant died and fell, probably into water, and decayed into peat, and the peat was folded inside the earth for years upon years—eons in which something like a month or decade or even your whole life was just a puff of air, a snap of two fingers.
And eventually the peat dried and became like stone, and someone dug it up, and the coal man brought it to your house, and maybe you yourself carried it to the stove, and now that sunlight—sunlight million years old—is heating your home tonight. Hundred-million year-old sunlight has heated our homes and powered our factories for decades. Today, that energy is delivered less often by the friendly neighborhood coal man and more by the ubiquitous electrical grid: About 39 percent of US electricity is generated by burning coal.
All that combustion carries a cost, though, as the carbon previously trapped underground in long-dead plants becomes greenhousing carbon-dioxide in the atmosphere. In , a group of researchers from around the country attempted to calculate that number. The researchers included economists from Accenture, doctors and public health researchers from Harvard University, and ecologists from universities throughout West Virginia.
Their best guess put it at The rock instead is obtained by a kind of landscape vampirism, a process with a simple and brutal name: mountaintop removal.
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