English Whenever coal prices fall, opponents of polluting fuels think demand is falling as consumers switch to cleaner, renewable energies. But at the moment, the reason for the price drop is mainly due to oversupply.
The price of coal in Asia, especially thermal coal at the Port of Newcastle (using a reference for the entire regional market) has continuously decreased in recent weeks, although exports have still increased.
The average price of this coal for the week ending June 9 fell to 72.01 USD/ton, the lowest in 2 years and 40% below the 7-year high reached in July 2018 (119 USD/ton). .74 USD/ton).
Indonesian thermal coal (low quality, energy 4,200 kCal/kg) decreased more slowly than high quality coal, but in recent weeks it has also gone down. Specifically, Indonesian coal for the week ended June 7, 2019 was only $36.66/ton, compared with $40.32/ton in March 2019 and also lost 28% from the 6.25-year high. achieved in February 2018 ($51.04/ton).
security is the lowest in 2 years, supply is exceeding demand
June 22, 2019 - 20:13 PM | Market
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Coal price is the lowest in 2 years, supply is exceeding demand
Illustration.
Whenever coal prices fall, opponents of polluting fuels think demand is falling as consumers switch to cleaner renewable energies. But at the moment, the reason for the price drop is mainly due to oversupply.
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The price of coal in Asia, especially thermal coal at the Port of Newcastle (using a reference for the entire regional market) has continuously decreased in recent weeks, although exports have still increased.
The average price of this coal for the week ended June 9 fell to 72.01 USD/ton, the lowest in 2 years and 40% lower than the 7-year high reached in July 2018 (119 USD/ton). .74 USD/ton).
Indonesian thermal coal (low quality, energy 4,200 kCal/kg) decreased more slowly than high quality coal, but in recent weeks it has also gone down. Specifically, Indonesian coal for the week ended June 7, 2019 was only $36.66/ton, compared with $40.32/ton in March 2019 and also lost 28% from the 6.25-year high. achieved in February 2018 ($51.04/ton).
Coal price is the lowest in 2 years, supply is exceeding demand - Photo 1.
Prices fell even though exports of the main coal suppliers to the Asian market (via sea) increased their exports.
Australia - which competes with Indonesia for the title of the world's largest coal exporter - exported 31.74 million tonnes of coal in May 2019, a slight increase from 31.53 million tonnes in May 2018. data from ship and port tracking company Refinitiv. In the three months to May 2019, Australian coal exports reached 96.37 million tons, up 5.4% over the same period in 2018.
Indonesia's exports also increased, reaching a total of 35.54 million tons in May 2019, up from 30.77 million tons in the same month last year, for the three months ended in May 2019, exports reached 102 .82 million tons, up 13.5% compared to 90.6 million tons in the same period in 2018.
Even the third largest exporter, South Africa, which has faced difficulties related to capacity and weather at the Richards Bay export port, it has increased exports slightly in the March-May period. , totaling 19.23 million tons, 4% higher than 18.49 million tons in the same period last year.
Import demand
The world's two largest coal importers, China and India, also increased purchases. According to data from China Customs, imports in the first five months of 2019 increased by 5.6% to 127.39 million tons.
And India increased imports even while coal prices were still expensive. Refinitiv data shows that in April-May 2019 India imported the most coal since Refinitiv started compiling data in 2015. Specifically, in May 2019, India imported 20.28 million tons of coal. , down slightly from 20.34 million tons in April 2019, but compared to the same period in 2019, both these two months increased sharply, reaching 17.08 million tons (May 2019) and 15.95 tons respectively. million tons (April 2019).
In Japan, the world's third-largest importer, import restrictions have had little effect, with imports in the first four months of 2019 down 0.8 percent year-on-year to 61 ,39 million tons. The main statistics for May will be published at the end of June 2019.
As for Korea, the fourth largest coal importer in Asia, the import rate is decreasing rapidly, the import volume in the first four months of 2019 reached 41.8 million tons, down 8.5% over the same period last year.
However, some emerging Asian importers increased their purchases. Low-gain Reuters data shows that Vietnam has
imported 4.02 million tons of coal in the February-May period, compared with 950,000 tons in the same period last year.
Statistics from water transport show that demand from major customers in Asia has increased this year. Maybe the main reason is cheap price - which explains India's recent increase in imports.
It could also be due to another reason, which is the drop in liquefied natural gas (LNG) prices that put pressure on coal prices. The price of LNG delivered to China fell to $4.25 per million British thermal units (BTUs) in the week ending June 10, 2019, the lowest in three years.
But one reason that cannot be ignored is that coal producers are supplying more than buyers need, so they have to lower prices to attract customers.
Van Chi
According to Finance Plus/Reuters