EU coal imports halved on the year in March to a fresh 30-year low, with little prospect of recovery in the short term amid low regional power demand and stiff competition from natural gas.
Net thermal coal imports among EU-27 members from countries outside of the bloc fell by 3.7mn t, or 50.6pc, on the year to 3.6mn t in March, according to Eurostat data released last week.
The Netherlands led the decline in absolute terms, importing 1.1mn t less on the year at 1.5mn t. The fall in deliveries into northwest Europe led to a drawdown in stocks at the Amsterdam-Rotterdam-Antwerp (ARA) hub at the start of 2020, despite a collapse in regional coal burn. ARA stocks stood at 5.7mn t last week, down by 860,000t since 1 January.
Germany recorded the next largest drop, with net imports collapsing by 933,000t on the year to 256,000t, followed by Spain, whose imports fell by 655,000t to 239,000t, and Poland, where inflows sank by 496,000t to 526,000t.
Europe’s overall power demand has been hit by measures to curb the spread of Covid-19, while abundant gas supplies continue to weigh on prices and incentivise gas burn over coal.
Overall power generation in Germany, France, Spain and the UK fell by 5.2pc on the year to 176GW in March. But as more extensive lockdowns were imposed regionally, generation slumped by 16.3pc in April. Generation in the first half of this month remained low at 141GW, but a minor recovery in demand as lockdowns begin to ease has narrowed the deficit to last year, compared with April.
Coal was the hardest hit among all the power-generation sources in April, with generation falling by 63.6pc on the year to 2.4GW. This 4.2GW drop in generation is equivalent to 1.1mn t less NAR 5,800 kcal/kg coal consumption in 40pc-efficient power plants.
Gas-fired output fell by a lesser extent of 33.7pc to 16.7GW in April, while hydro and solar generation last month posted year-on-year growth.
German clean dark spreads for base-load generation in 38pc-efficient thermal plants remain in negative territory through to the fourth quarter, and theoretical profit margins are at €5-7/MWh below equivalent clean spark spreads for 55pc-efficient gas-fired plants this winter.
Russia remained the EU’s dominant supplier in March, accounting for 2.5mn t of imports, a fall of 44pc on the year. Colombian supply rose by 43.5pc to 659,756t, but this recovery is unlikely to last long, with the outlook for European coal burn weak and Colombian producers moving to scale back production amid squeezed margins and a weak price environment. The US and South Africa shipped a combined 326,000t of coal to the EU, with imports from both origins more than halving on the year.
The EU-27’s cumulative net imports between January-March fell by 13.8mn t on the year to 12.5mn t.
UK runs down coal stocks
UK coal import data have not yet been released for March, but provisional February net imports were 212,000t, down from 664,000t on the year, according to government figures.
UK coal stocks stood at 4.3mn t in February, down by 21pc on the year and close to the record low of April 2018. Stocks fell because remaining supplies at the 1.5GW Fiddler’s Ferry site were burned ahead of its March decommissioning. Stocks at power plants were 2.7mn t, down by 36.6pc on the year, with coke ovens holding 340,000t and stocks at other sources, including in transit and at collieries, rising by 57.1pc on the year to 1.3mn t.
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- On May 20, 2020