International Coal Markets

Transcription

1 International Coal Markets Nigel Yaxley Managing Director, CoalImp 26 th November 28 International Coal Markets World supply and demand Seaborne trade Reserves and resources International prices World Energy Outlook UK coal supplies Slide 2 1

2 World Supply and Demand Coal the world s fastest growing fuel Million Tonnes Oil Equivalent Source: BP Statistical Review Oil Coal Gas Nuclear Hydro Slide

3 China already dominates world demand 2 Million Tonne s Coal Equivalent World Coal Consumption 27 (including lignite) China EU25 Source: IEA Coal Information 28 India Slide 5 Japan South Africa and most of the world s coal is produced at home 3 Million Tonnes Global Hard Coal Production in 27 5 China India Australia South A frica Source: IEA Coal Information 28 Slide 6 Indonesia Poland Kazakhstan Colombia Ukraine Seaborne Trade 3

4 China also drives hard coal production growth 6 Million To nnes Ukraine Colombia Kazakhstan Poland Indonesia South Africa Australia India United States PR of China Source: IEA Coal Information 28 Slide 7 but second tier producers also show interesting trends Million Tonnes India Australia South Africa Indonesia Poland Kazakhstan Colombia Source: IEA Coal Information 28 Slide 8 4

5 Seaborne Trade World seaborne hard coal trade continues to grow Million Tonnes Coking Coal Steam Coal Source: IEA Coal Information 28 Slide 1 5

6 Hard coal trade patterns (IEA 25) (million tonnes) Slide 11 Major coal importers in 27 top 5 account for 5% Million Tonnes Japan Spain 24.4 Italy Germany 46.3 China 47.6 UK 5.3 India 54.1 Taiwan 68.9 Korea 88.3 Source: IEA Coal Information 28 Slide 12 6

7 Major coal exporters in 27 top 2 account for almost 5% Million Tonnes China 53.7 Canada Australia South Africa 66.7 Colombia Indonesia 22.2 Source: IEA Coal Information 28 Slide 13 Reserves and Resources 7

8 Reserves of coal are evenly distributed around the globe N. America 122/1/7 Global Energy Reserves 27 FSU 17/17/48 Asia Pacific 137/5/13 Europe 18/2/5 Middle East /13/66 S. & Cent. America 8/16/7 Africa 34/16/13 Source: BP Statistical Review of World Energy 28 Slide 15 coal / oil / gas (billion tonnes oil equivalent) The top five countries have 8% of proven reserves 25 Billion Tonnes PR China Source: BGR - Bundesanstalt fürgeowissenschaften und Rohstoffe Slide 16 India South Africa Aust ralia Ukraine Poland Brazil Kazakhstan Canada U nited Kingdom 8

9 whereas China and have almost 8% of resources Trillion Tonnes PR China Source: BGR Reserves India South Africa Australia Resources Slide 17 Ukraine Poland Brazil Kazakhstan Canada U nited Kingdom International Prices 9

10 Steam coal prices delivered to North-West Europe where next? $/tonne /GJ 5 Jan 7 Feb 7 Source - MCIS Mar 7 Apr 7 May 7 Jun 7 Jul 7 Aug 7 Sep 7 Oct 7 No v 7 Dec 7 $/tonne Slide 19 Jan 8 Feb 8 /GJ Mar 8 Apr 8 May 8 Jun 8 Jul 8 Aug 8 Sep 8 Oct 8 No v Coal prices are still high by historic standards 25 $/to nne International coal prices delivered to North West Europe Source - MCIS Slide

11 and remain well above cash costs of production Slide 21 Freight from Richards Bay to Rotterdam has crashed $/Tonne Jan 7 F eb 7 Mar 7 Apr 7 May7 Jun 7 Jul 7 Aug 7 Sep 7 Oct 7 Nov 7 Dec 7 Jan8 F eb 8 Mar 8 Apr 8 May8 Freight Richards Bay - ARA Jun8 Jul 8 Aug 8 Sep 8 Oct 8 N ov 8 Source - MCIS Slide 22 11

12 World Energy Outlook IEA projects world coal demand increasing by 61% to 23 (in reference scenario) 8 Million Tonnes Coal Equivalent % on 25 27% Demand Reduction 51% Demand Reduction Reference Scenario '55' Scenario '45' Scenario Source: IEA World Energy Outlook 28 Slide 24 12

13 Coal Trade in Reference Scenario 23 (million tonnes) HARD COAL TRADE IN REFERENCE SCENARIO, 23 (million tonnes) 3 May7 6 3e 37e RUSSIA 33 18e KEY: EXPORTS (e.g. 1 Mt) 2 e TO ASIA PACIFIC MARKET 3e MEXICO 1 59 CANADA 23 4e 112 OLAM 22 13e BRAZIL 22 ATLANTIC MARKET 9e NAFR 12 OECDEUR /EU SAFR 3 17 ME 28 ETnonEU +ATE 39 8e 3 3 INDIA 84 CHINA 39 ODA 199 KOREA INDONESIA 11e JAPAN 162 ASIA PACIFIC MAR KET 3 2 e 1 IMPORTSinto REGION or COUNTRY (e.g. 1 Mt) 5 4 7e 7 8e AUNZ 1 REGION 1 Source: World Energy Outlook 26, IEA Notes: e after tonnage means an estimated split between Atlantic and Pac ific markets Source: IEA Slide 25 UK Coal Supplies 13

14 Coal provided 36% of UK power in 27 Nuclear 16% Oil 1% 6% Coal 36% Gas 41% Source - BERR Slide 27 with imports providing almost three quarters of total supply Colombia Canada 1.7 Indonesia UK 17. Million Tonnes Australia 4.7 South Africa Source BERR/HMRC Slide 28 14

15 How we got here UK steam coal supply and demand Million Tonnes Source - BERR Steam Coal Demand Slide UK Production Contrasting supplies in 27 for steam coal and coking markets Coking Coal (7.9 Mt) Steam Coal (35. Mt) Canada Australia NB Pie charts to scale by area South Africa Colombia Indonesia Source -HMRC Slide 3 15

16 The mix of UK steam coal imports has changed dramatically 2,5, 2,, Monthly Tonnage 1,5, 1,, Colombia Indonesia South Africa 5, Jan-5 Source - MCIS Apr-5 Jul-5 Oct-5 Jan-6 Apr-6 Jul-6 Oct-6 Slide 31 Jan-7 Apr- 7 Jul-7 Oct-7 Jan- 8 Apr- 8 Jul- 8 Steam coal imports in 27 used a wide range of ports Clydep ort Liverpool Leith Rosyth Grangemouth Blyth Tyne Tees Hull Immingham NB Arrows to Scale Newport London Medway Avonmouth Source EWS Energy/HMRC Minerals Engineering ATH Society Seminar Nottingham 26 th November 3 October Slide 32 16

17 Summary Coal is the worlds fastest growing fuel China is the major driver Seaborne trade is largely dependent on second tier producers and consumers Coal reserves are abundant and distributed around the globe But, China and have the lion s share Coal prices have shown massive volatility in 28 But are still high by historic standards UK is a minor player on the world coal stage But remains the world s fifth largest importer Slide 33 Thank You nigelyaxley@coalimp.org.uk 17