"In 2022, due to the impact of many" gray rhino "and" black swan "events, such as high inflation, continuous epidemic, Russian-Ukrainian conflict, extreme high temperature and drought weather, the global coal market tightened up and the price oscillated sharply, creating a historical" sky-high price ". Recently, in reviewing the operation of the global coal market in 2022, Liang Dunshi, vice chairman of the China Coal Economic Research Association, said.
Liang Dunshi said that due to the long-term underinvestment in global fossil energy, especially in the coal industry, the global coal market may continue to be in a state of tight supply for a long time to come, and the international market price may continue to run at a high level this year. According to the report released by the
International Energy Agency (IEA), global coal production will increase by 5.4% year-on-year in 2022, which is expected to reach about 83.
Among the 15 major coal-producing countries in the world, only three major coal exporters, Australia, South Africa and Canada, have experienced a slight decline of 2% to 6%, while the remaining 12 coal-producing countries have increased by different margins, especially the top three coal-producing countries. China's coal output remained the first in the world, reaching 4.56 billion tons in 2022, an increase of 10.5% over the same period last year; India and Indonesia ranked second and third, with coal production reaching 910 million tons and 680 million tons respectively, with growth rates of 12.1% and 11% respectively. The top three coal-producing countries increased by nearly 600 million tons, accounting for more than 90% of the total increase in global coal production, and played an important role in their own production and supply. In terms of
consumption, Liang Dunshi pointed out that in the first half of 2022, due to inflation and other factors, global economic growth slowed down in a large area and energy consumption was restrained to a certain extent, but with the escalation of geopolitical tensions triggered by the Ukraine crisis, Russia restricted the supply of natural gas to Europe, and the price of natural gas rose sharply. It promotes the fuel conversion from natural gas to coal in many countries, and the energy consumption structure is inclined to coal, which promotes the demand for coal. According to the forecast of the International Energy Agency, the global coal consumption in the first half of 2022 decreased by 0 compared with the same period in 2021. In the second half of the year, the conflict between Russia and Ukraine still disturbed the energy supply and demand, coupled with the extreme high temperature and drought weather in many countries, the output of nuclear energy and new energy dropped sharply, and the demand for coal was further released. At the end of the year, the International Energy Agency released a report that the total global coal consumption exceeded 8 billion tons for the first time in 2022, an increase of
5.8%
over the same period last year. According to the shipping tracking data of Refinitiv, the global seaborne coal trade volume increased by 5.
From the perspective of coal exporting countries, the coal export volume of Australia, the United States, Russia and other countries declined to varying degrees in 2022. In contrast, small and medium-sized coal exporters such as Colombia, South Africa, Canada and Kazakhstan showed export growth ranging from 2% to 20%.
Liang Dunshi pointed out that it is worth noting that Indonesia, as the world's largest coal exporter, banned coal exports in early 2022, but the country's annual coal export growth rate was as high as 9.
The sustained high prices in the international market have restrained coal imports, and the imports of most major coal importing countries have declined to varying degrees.
In sharp contrast, Germany, Poland, the Netherlands and other countries in Europe, as well as India in South Asia, have increased their demand for international seaborne coal, which has pushed coal imports to continue to grow by a large margin. Coal imports from EU countries increased by more than 30% year-on-year in 2022.
Liang Dunshi said that in terms of power coal, the world's four major coal price indices, namely, the price of power coal in three European ports, the price of power coal in Richards Port, South Africa, the price of power coal in Newcastle Port, Australia, and the benchmark price of power coal in Indonesia, are the largest in the world. It fell to the bottom between April and September 2020, rose sharply in October 2021, and peaked in the second half of 2022. Now, these price indexes have fallen back to the same level or slightly lower than same period last year.
Compared with thermal coal, the price of coking coal is in a state of sharp rise and fall. On March 18, 2022, the closing price of high-quality coking coal at Fengjing Mine in Queensland, Australia, fell from 97 per ton in November 2020. At present, the price has fallen back to 385 US dollars per ton, which is still far higher than average level of the past five years.
However, it is worth noting that under the global trend of green and low-carbon development, hundreds of large banks and investment institutions around the world have announced that they will no longer provide financial support to the fossil energy industry, especially coal. In addition, large multinational diversified mining companies, such as Rio Tinto and Anglo American, have successively withdrawn from the coal industry under the pressure of corporate reputation; BHP Billiton has recently gradually divested and sold the coal mine assets of non-high-quality coking coal, and Teck Resources of Canada is also separating the metal mineral and coal mining industries; Glencore Group, the world's largest thermal coal producer and exporter, has proposed to control coal production.
"At present, global investors are very cautious about investing in the coal industry, and their willingness to invest is low." Liang Dunshi said. When
talking about the characteristics of the global coal market in 2022, Liang Dunshi believes that the regional differentiation of the coal market is further intensified, which mainly presents the following characteristics: the "de-coal" in Europe has experienced twists and turns, and the growth of coal exports in the Americas is fatigue. There are still bottlenecks in coal supply in Africa, and coal production and consumption in the Asia-Pacific region have increased.
In Europe, over the past decade, the region has been promoting the "de-coalification" of the energy market, and coal consumption has continued to decline. After the conflict between Russia and Ukraine broke out in February
2022, the European Union imposed an embargo on Russian coal. In order to ensure the security of energy supply, Germany, Italy, Austria, the Netherlands and the United Kingdom have indicated that they will delay the elimination of coal-fired power plants and increase coal-fired power generation. Meanwhile, coal-producing countries such as Germany, Poland, the Czech Republic and Hungary have increased coal production. In addition, European countries have accelerated the pace of global coal procurement.
Liang Dunshi pointed out that according to Lufute shipping tracking data, in 2022, coal imports from EU countries increased substantially, reaching 1. In 2022, EU coal consumption is expected to increase by about 7%.
Previously, Italy, France, Britain and other countries promised to phase out coal around 2025, the Netherlands promised to phase out coal by 2030, and Germany promised to phase out coal by 2038. The restart of coal power in Western European countries has caused great twists and turns in the process of "de-coal" in Europe. In
the Americas, U.S. coal exports fell by 0 in 2022 compared with the same period last year. According to a recent outlook report released by the U.S. Energy Information Administration (EIA), U.S. coal exports are expected to grow by 2 in 2023.
Colombia, which is also the fifth largest coal exporter in the world, mainly produces thermal coal. According to the National Bureau of Statistics of Colombia, in 2022, the country's coal export volume was 60.935 million tons, an increase of 2.
In Africa, South Africa's coal output in 2022 was 231 million tons, a decrease of 1. In 2022, driven by high coal prices, the country exported 71.5 million tons of coal. Year-on-year growth 8.
In Asia, India's coal production reached 777 million tons in the 2021/2022 fiscal year, an increase of 8. Indian Coal Minister Pralhad Joshi (Pralhad Joshi) said that in order to meet domestic energy demand, India's coal demand is expected to rise steadily in the next eight years. By 2030, India's coal demand is expected to increase to 1.3 billion tons to 1.5 billion tons.
In addition, as the world's largest exporter of thermal coal, Indonesia's coal production continued to grow in 2022, reaching 687 million tons, an increase of 5. In 2022, the country exported 467 million tons of coal, an increase of 9. In 2023, Indonesia's production target was 695 million tons. Estimated export 5.
As one of the world's major coal producers, Australia will export 347 million tons of coal in 2022, a year-on-year decrease of 18.75 million tons, a decrease of 5. Of which, the export volume of thermal coal will be 184 million tons, a year-on-year decrease of 7.4%, and the export volume of metallurgical coal will be 1.
However, the Australian government predicts that in 2023, the country's export volume will reach 384 million tons, an increase of 10. Among them, the export of thermal coal increased by 9.2% to 201 million tons, and the export of metallurgical coal increased by 12.3%.
Liang Dunshi pointed out that although in the months from the end of last year to the beginning of this year, due to the warmer winter temperature in the northern hemisphere, the abundant natural gas reserves in Europe, the cliff-like decline in natural gas prices, the reduction of coal-fired power generation output and the high coal stocks, coal prices fell sharply under pressure, the fundamentals of tight supply in this coal cycle remained unchanged.
From the perspective of coal demand, global coal demand will remain at a high level from this year to 2025 or even longer, and may even rise slightly. Coal consumption in Europe and the United States is indeed declining, but coal consumption in Southeast Asia and South Asia will continue to grow substantially. The International Energy Agency predicts that global coal demand is likely to peak in 2022 or 2023 and level off thereafter. By 2025, global coal demand will stabilize at about 8 billion tons.
From the perspective of international coal import and export situation, on the one hand, the demand of major coal importing countries and regions in the world is still rising, including the European Union, India, Southeast Asia, etc.; on the other hand, major coal exporting countries such as South Africa, the United States, Colombia, Russia, Indonesia and Australia all have various problems, and increasing coal exports has greater uncertainty.
"The main reason for the tight supply of coal is not that the demand is growing too fast and the growth rate is too large, but that the coal production capacity is relatively insufficient.". In recent years, Europe has aggressively withdrawn from coal and closed coal mines; under the impact of shale oil and gas, coal production capacity in the United States has been reduced by 40% and severely shrunk; China has pushed forward supply-side reform to eliminate excess capacity. The new coal supply capacity of the world's major coal-producing countries is very limited. Liang Dunshi said.
Liang Dunshi believes that the crux of insufficient production capacity is the lack of long-term investment in the coal industry. Under the global trend of green and low-carbon development, hundreds of large banks and investment institutions in the world have announced that they will no longer invest in fossil energy, especially coal. The willingness of multinational enterprises to increase investment in the coal industry is not strong, they dare not invest, nor are they willing to invest.
Liang Dunshi pointed out that coal is a commodity with obvious cyclical characteristics in the market. With the approaching of the time node proposed by various countries to cope with climate change and achieve the goal of carbon neutrality, the pressure of carbon emission reduction and carbon neutrality will continue to accumulate and grow, and the challenges faced by coal development will become more and more complex. If the radical energy transformation continues to restrain the development of coal, it will prolong the boom time of the current coal market cycle, which may last until 2025.
"Under the background of long-term tight market supply and high global inflation, it is expected that the international coal market price will remain high this year." Liang Dunshi said.
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