Australia is expected to surpass its annual coal export target in 2015 after its shipments "held up well" during the first half of 2015 despite weaker exports to China. Meanwhile, Indonesian exporters continue to face a heavy seaborne traffic decline in the wake of tighter regulations implemented in China.
In the first half of 2015, the seven major coal exporting countries tracked by SNL Energy shipped out 576.3 million tonnes of coal, accounting for 48.5% of the total exports estimated for these countries in 2015, according to data obtained from various sources.
It will take more bankruptcies in the coal sector and additional production to be taken out of the market before prices can really recover, according to industry experts. Meanwhile, miners around the world have started taking tough steps, including closing mines, in order to return to profitability amid prolonged oversupply seen in the seaborne market.
Total shipments from the world's seven major coal exporting countries in March jumped from February levels and were up 8.7% from January, showing exports gaining momentum despite a significant oversupply seen in the international seaborne coal markets, an SNL Energy analysis of data obtained from various sources showed.
Coal miners worldwide announced roughly 141 million tonnes of production cuts in 2014, with the majority of those coming from China, the U.S. and Australia, but supply rationalization has been "fairly limited" and not enough to offset overall coal output growth seen in the last year, analysts and industry experts say.
"We expect U.S. coal exports to continue to face a very challenging environment [in 2015], as the seaborne market remains oversupplied," Kristoffer Inton, an analyst at Morningstar, told SNL Energy. "We don't expect to see any significant change in U.S. market dynamics, but do expect to see more shutdowns of higher cost mines, particularly in the Central Appalachian basin."
Due to difficulties realizing energy policy targets in India, the IEA said the country's total thermal and lignite coal demand would grow by 4.7% per year, to 491 million tonnes of coal-equivalent, or Mtce, in 2019 from 372 Mtce in 2013. India will surpass the U.S. as the second-largest thermal and lignite coal consumer in the world, the agency said.
A Global CCS Institute official says the agreement between the United States and China to work together on carbon capture, usage and storage technology is a positive step forward in efforts to deploy CCS and address climate change around the world, as both countries are leaders in undertaking carbon capture and storage, or CCS, initiatives.
At a time when China is restricting coal use and enacting policies to limit coal imports, expectations of miners and traders have grown that India could emerge as the mainstay of global thermal coal demand. Nevertheless, some analysts still believe China will continue to drive the coal market, in part due to the continued dependence of its coal-intensive sectors on the fuel.
Thermal coal exports from major countries during the first half of 2014 were down 3% year over year, versus a 5% increase in metallurgical coal shipments in the same period even though met coal mine closures have been more prevalent than those for thermal mines in terms of both aggregate tonnage and proportion of the seaborne trade...
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The world's seven major coal-exporting countries shipped out 92.3 million tonnes of coal in April, a 13% decline from March levels, with the seaborne markets growing at a slower place despite new demand and supply centers opening in the near future.
Colombia could boost its coal shipments to the Asian-Pacific market after a decline in demand in its traditional markets of the U.S. and Europe. The OCE estimates that the expansion of the Panama Canal could reduce the shipping time by up to 15 days and reduce the cost of shipping to Asia.
Coal shipments from seven major exporting countries are expected to decline in 2015 from 2014 levels, but it may be still not enough to allay industry concerns of a widening gap between the demand and supply side, according to forecasts.
Chinese coal imports are expected to remain robust in 2015, despite facing pressure from several environment-friendly policies introduced this year, and such demand from China, as well as India, could boost coal prices in the global seaborne market in the second half of 2015, according to coal analysts.
Reacting to a minister's statement that India could halt thermal coal imports in the next two to three years, coal experts told SNL Energy that the country remains a "structural bull story for the seaborne thermal coal market" and will continue its reliance on coal imports to meet its growing energy demands.
The amount of coal-fired capacity in major Asia countries is expected to more than double from 2014 through 2035, with China and India continuing to lead the growth, but also with countries like Vietnam building more coal plants despite efforts by developed nations to move away from coal.
It could take years to clear the oversupply of coal on international markets, as coal producers seem to stray away from making meaningful output cuts and with low-cost mines still making money in the weak pricing environment, sources say.
China Plan Puts High-Sulfur Coal From US at Risk Energy Tribune China may ban purchases of coal with a heating value below about 4,540 kilocalories a kilogram on a net-as-received basis, sulfur content above 1 percent and ash above 25 percent,...
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