The Coal Trader

Coal News & Price Data – November 28, 2023 – Another Mining Accident in China

Coal Prices

  • Premium Low Vol (FOB Australia) $324.00/mt (+5.00)
  • CFR China PLV equivalent (Nov ’23) $291.00 (+6.33)
  • PLV China Netback $306.15 (-0.45)
  • PCI (FOB Australia) ~$175.50 (unch)
  • Low Vol HCC (USEC) $266.00 (unch)
  • High-Vol A (USEC) $281.00 (unch)
  • High-Vol B (USEC) $240.00 (unch)

  • CFR South China (5,500) $115.85/mt, (+0.30)
  • Kalimantan (4,200) $59.95 (+0.50)
  • FOB Newcastle (6,000) (Dec ’23) $127.50 (-0.50)
  • FOB Newcastle 20% Ash (5,500) $94.95 (unch)
  • CFR India West (5,500) $112.00 (+0.30)
  • CIF ARA (6,000) $120.00 (+2.00)
  • Richards Bay (5,500) $94.90 (-1.10)
  • Baltimore 3% Sulfur (6,900) $87.50 (+0.25)

Another Mining Accident in China

Eleven people lost their lives in a coal mine accident in China’s Heilongjiang province. The incident occurred at the Shuangyang coal mine of Heilongjiang Longmei Shuangyashan Mining Co, and it is believed to have been caused by a rock burst. Rock bursts happen when stored energy in rock causes violent fractures. The cause of the accident is under further investigation. China has witnessed several deadly coal mine accidents this year, despite government calls for stricter safety standards.

The State Mine Safety Supervision Bureau in China, led by Huang Jinsheng, held a special meeting on November 25 to implement General Secretary Xi Jinping’s instructions on production safety. The meeting emphasized the importance of learning from recent accidents, following the decisions of the Party Central Committee and the State Council, and preventing various risks and hidden dangers in mine safety. The participants discussed specific implementation measures, division of responsibilities, and the need for powerful and effective actions to ensure mine safety at the end of the year and the beginning of the next. Supervision and assistance “look back” initiatives were organized in several provinces, and strict enforcement measures were urged to prevent and contain major accidents.

Thermal Coal News

Neutral: Demand for low-calorific value (CV) coal continued in the Asian thermal coal market on November 27, particularly for Kalimantan 4,200 kcal/kg GAR, while demand for higher grades remained subdued. Some spot demand for low-CV coal was reported from China, with varying demand in different regions based on stock levels. Prices for Kalimantan 4,200 kcal/kg GAR coal ranged between $59.50/mt FOB and $61.50/mt FOB for December-loading cargoes. Chinese domestic coal prices experienced volatility, influenced by fluctuating demand. Indian demand was picking up due to surging electricity demand and increased economic activities, with rising stock-and-sale demand for Kalimantan 5,000 kcal/kg GAR. Coal stockpiles at Indian power plants were at 25.21 million mt on November 24, sufficient for slightly over 9 days of coal burn. Indonesian supply constraints eased, but miners prioritized the domestic market due to a dearth of spot demand. Lower water levels in central Kalimantan rivers caused loading issues for some miners, but no significant supply problems were expected for thermal coal.


Neutral to Bullish: As of November 28, the outflow from China’s Three Gorges Reservoir is down 19% from the same period last year and 42% from 2021. The average daily flow in the second half of November is 7462m3/s, compared to 7924m3/s last year. However, the inflow is 19% higher than last year, with an average daily flow of 8711m3/s, up 30%. This discrepancy between high inflow and low outflow may be due to increased water storage capacity in reservoirs to address lessons learned from the previous year’s extreme water shortage. Despite better storage conditions than last year, overall precipitation remains low in major hydropower provinces, posing potential challenges for hydropower output in the coming months.


In October, India imported 25.58 million tons of coal and coke, marking a 26.29% year-on-year increase and a 9.72% month-on-month increase, according to data from Indian coal trader Iman Resources. Non-coking coal imports reached 18.99 million tons, up 52.72% year-on-year and 16.33% month-on-month, while coking coal imports totaled 4.24 million tons, reflecting a year-on-year decrease of 12.75% and a month-on-month increase of 3.97%. The majority of non-coking coal imports came from Indonesia, while coking coal imports were mainly sourced from Australia. From January to October, India’s total coal and coke imports amounted to 223 million tons.


Bearish: In October 2023, India’s petroleum coke consumption decreased by 10% YoY to 1.54 million metric tons but increased by 5% MoM. The country’s petroleum coke production for the same month was 1.09 million metric tons, reflecting a 3% increase YoY. From April to October 2023, India’s pet coke consumption reached 11.27 million metric tons, up 7%, while production for the same period was 8.62 million metric tons, slightly lower than the previous year. For FY’24, the Director General of Foreign Trade initially allocated 1 million metric tons of raw pet coke due to ongoing legal issues, with the remainder subject to resolution of these matters. BPCL, RIL, MRPL, and CPCL have adjusted pet coke prices for November shipments, anticipating increased demand in the coming months.


Consol Energy’s Chief Financial Officer, William Lyons, is urging the U.S. federal government to support the development of coal-to-liquid (CTL) fuel to incentivize coal producers to invest in CTL plants. Lyons emphasized that government backing is crucial due to the substantial capital requirements, ranging from $3 to $5 billion, for building significant CTL plants. He argued that a government guarantee is necessary to encourage coal producers to commit to the substantial investment. Consol Energy, a major coal miner, has been exploring CTL technology and formed alliances for the development of coal-based liquid fuels refineries. Lyons stressed the national security aspect of reducing dependence on foreign oil, particularly in the context of military reliance. The environmental group Natural Resources Defense Council criticized liquid coal, highlighting its carbon emissions, while the Coal-to-Liquids Coalition advocates for CTL fuels, emphasizing their cleanliness and potential for reduced emissions with carbon capture storage. The call for government support aligns with ongoing discussions among U.S. senators to include provisions for CTL technology in an energy bill.

Metallurgical Coal News

Bullish: Asian metallurgical coal FOB prices saw support on November 27 due to strong buying interest. The benchmark Premium Low-Vol Hard Coking Coal rose $5/mt to $324/mt FOB Australia, while the CFR China price remained unchanged at $322/mt CFR China. Notable bid/offer activities were observed for December/January loading of Premium Mid-Vol Coal. A reported deal was made at $325/mt FOB Australia for 40,000 mt of premium mid-vol Goonyella with Jan 1-10 loading. Bid-offer range for a different cargo was $322-$340/mt FOB Australia for Dec 16-25 loading. Supply-side issues and active buying interest were cited as reasons for the uptick in prices. In the CFR China market, prices started the week steady, influenced by futures market bullishness, but uncertainty persisted regarding whether the spot market would follow the upward trend. Chinese traders and end-users showed increased appetite for seaborne prime coal, with some bids exceeding $300/mt CFR levels. Domestic coking coal prices were expected to remain high due to tight resources and recent mine incidents, discouraging miners from increasing production. Prices in the Chinese met coke market remained steady, with potential for a second round of proposed price hikes followed by proposed price cuts by mills due to cost pressures.


India plans to increase imports of coking coal from Russia due to a drop in supplies from Australia, the usual top supplier. Australian coking coal prices surged 50% to over $350 a metric ton last month due to various factors, prompting India to explore alternative sources. While Australia has assured steady supplies, India is keen to diversify its import basket. Russian coking coal cargoes are reportedly cheaper than Australian supplies, and Russian suppliers are willing to offer discounts. Some Indian steel mills have opted for rupee settlement for Russian coking coal, making it an attractive alternative.


Bullish: Atlantic metallurgical coal markets experienced further price support for US exports from Asia, with rising values in the Asian market and increasing derivatives prices. Tradables values, prior to the Thanksgiving break, were indicated above index levels for certain US coals. Limited spot activity was observed, and suppliers reported no spot availability, with all available laycans sold through at least January. Competition for some US coals was expected in China and India. The US East Coast Low Vol HCC benchmark rose $3 to $266/mt, and the US High Vol A price increased $3 to $281/mt FOB US East Coast. The HVA-to-PLV FOB Australia spot price spread narrowed to minus $38/mt. The US High Vol B benchmark rose $2 to $240/mt FOB US East Coast. Derivatives prices increased with a slight backwardation in prompt months, and spreads for forward prices added to tradable value. The December contract rose 1.6% to $320/mt FOB, January increased 1.27% to $318/mt, and first-quarter 2024 was assessed at $318/mt.


Indonesian coke maker PT Risun Wei Shan has obtained an export license, and its first shipment of 20,000 tons of coke, loaded on November 27, is destined for Tata Steel in India through commodities trader Trafigura. This marks the beginning of coke export operations for the 4.8 million tons per year coking project. PT Risun Wei Shan, the first overseas coking project investment by China Risun Group, operates two coke ovens with a total capacity of 1.6 million tons per year, with a third coke oven in progress. China Risun Group, which aims to expand its capacity to 30 million tons per year by 2025, is also supplying Chinese metallurgical coal to PT Risun Wei Shan.


Bullish: The slowing pace of crude steel output reductions in China, along with firming steel prices, is expected to support domestic metallurgical coal prices. This could prompt Chinese buyers to return to the seaborne premium met coal market. Factors such as rebar profit reaching above RMB100/t, maintaining high blast furnace capacity utilization rates, and postponed blast furnace maintenance in some North China steel plants are contributing to a firmer steel market sentiment. Safety inspections impacting some Shanxi miners have raised concerns about domestic met coal supply, potentially leading to an increase in seaborne coal prices into China.

Steel & Iron Ore News

Bearish: Continued slow demand, high energy costs, and low steel prices may lead to more European blast furnaces being idled in Q1 2024, despite it typically being a high production period. As of November 27, nearly 22 million tons of blast furnace capacity in the EU is idled, up from around 21 million tons at the same time last year. Blast furnaces are currently running at around 60% utilization rates, and EU steel output has fallen to 107 million tons in the first ten months of the year, down 9% YoY. Steelmakers, including ArcelorMittal, have already announced idlings due to market conditions. Traders indicate that two mills in northern Europe are considering idling their blast furnaces towards year-end or in January. The EU manufacturing output index remains in contraction mode, and concerns about the implementation of the Carbon Border Adjustment Mechanism (CBAM) persist.


ArcelorMittal South Africa (AMSA) is considering winding down operations at its Newcastle and Vereeniging long steel plants due to the country’s economic slowdown, weak domestic steel demand, and high logistical costs. The company has initiated the required consultation process and will provide further details at a media briefing. The decision could affect around 3,500 employees. AMSA’s recent financial results showed significant operational challenges, with EBITDA dropping 86% to ZAR499 million ($26 million) during the six months ended June 30, 2023, compared to ZAR3.59 billion ($190 million) a year ago.


Bullish: In October 2023, China’s automobile exports reached 526,000 units, showing a sustained growth rate of 47%. From January to October 2023, China’s total automobile exports amounted to 4.24 million units, maintaining a strong growth rate of 58%. The robust export market, coupled with the gradual recovery of domestic automotive sales, contributed to the industry’s overall performance. The growth is attributed to the increasing competitiveness of Chinese products, successful penetration of European and American markets, and the replacement of Russian brands by Chinese cars amid the Russian-Ukrainian crisis. The expansion of China’s new energy vehicle competitiveness significantly contributed to the overall export growth. The China Association of Automobile Manufacturers (CAAM) anticipates total vehicle sales to surpass expectations and reach a record high of 30 million units for the year, with new energy vehicle sales expected to increase by 30% YoY to 9 million units.

Power Market News

LNG cargo swapping has increased due to challenges in the Panama Canal, prompting risk mitigation in a volatile market, says Petronas LNG CEO Ezran Mahadzir. Lack of past investments has led to global capacity shortages amid growing LNG demand, geopolitical risks, and uncertainties over a harsh Northern Hemisphere winter. The market is expected to remain volatile until new projects emerge around 2026-27. Mahadzir anticipates LNG prices will not return to pre-COVID levels of $7-$8/MMBtu. Despite present inventory levels, prolonged harsh weather could induce spot market price volatility. Petronas remains optimistic about LNG growth, with new projects in Sabah and discussions for expansion in Canada, Argentina, and the US Gulf. Southeast Asia is seen as a significant growth opportunity in the LNG market.


The planned retirements of Maryland’s three remaining coal-fired power plants have raised questions about the costs of the clean energy transition within the PJM Interconnection LLC’s 13-state mid-Atlantic footprint and the grid operator’s planning process. The Federal Energy Regulatory Commission (FERC) approved a $785 million package of grid upgrades proposed by PJM to manage the planned deactivation of Talen Energy Corp.’s 1,273-MW coal-fired Brandon Shores power plant in June 2025. The package is expected to be operational by the end of 2028. Commissioner Allison Clements expressed concern about the awarding of “immediate-need reliability projects” without competitive solicitation, and Commissioner Mark Christie questioned the allocation of grid upgrade costs to ratepayers outside of Maryland. The Maryland Public Service Commission protested, stating that PJM’s planning process precludes consideration of viable alternatives, including energy storage. PJM has asked Talen to continue operating Brandon Shores through the end of 2028 under a reliability must-run arrangement.