Fob prices for US exports of thermal coal (loaded at major ports on the East Coast) have remained unchanged so far this week — after having eased slightly since last week for both Baltimore and Hampton Roads, although the FOB New Orleans price had risen.
With increasing investment in renewable energy, the United States continues to steadily phase-out its aging coal-fired power plants. In 2018, the US retired 12.9 gigawatt (GW) of coal-fired capacity, while 6 GW of coal-fired capacity will be retired in 2019, and 5 GW in 2020, according to industry projections.
With domestic demand in decline, US coal producers are becoming increasingly reliant on the export market.
But a confluence of bearish fundamentals has already been hampering demand in Europe – the major export destination for US thermal coal exports.
Low European-delivered thermal coal prices have made it increasingly difficult for the U.S. producers to generate viable profit margins relative to domestic opportunities.
Thermal coal prices in Europe have experienced a significant downturn since the start of 2019, following an unseasonably warm weather and a glut of liquefied natural gas shipments from Asia hurting gas prices and eventually demand for coal.
The combination of cheap natural gas prices and an added benefit from government subsidies have provided lucrative opportunities for coal-to-gas switching in most EU nations.
Further, as European power utility companies come under increased governmental pressure to reduce carbon emissions, several existing coal-fired power plants have already been repurposed to run using less-polluting fuels such as biomass and natural gas, while many others are seeking permit changes for conversion.
PRICE ASSESSMENTS
| Week No./
Assessment Date(s) |
FOB Baltimore
6,000 NAR |
FOB Hampton Roads
6,000 NAR |
FOB New Orleans
6,000 NAR |
| Week 37 (9th Sep – 13th Sep) | 48.77 | 64.95 | 39.70 |
| Week 38 (16th Sep – 18th Sep) | 48.48 | 64.50 | 40.25 |
| Change (%) | -0.59 | -0.69 | 1.39 |
N.B.:
1. All prices are in USD/MT
2. Weekly price is derived by averaging daily prices of every official business day; between and including Monday through Friday
Logistics
| Load Port | Unload Port | Vessel Class | Cargo Intake (MT) | Freight Rate (USD/MT) |
| Baltimore, Maryland, USA | Mundra , Gujarat, India | Capesize | 149,000 | 31.31 |
| New Orleans, Louisiana, USA | Mundra , Gujarat, India | Panamax | 65,000 | 38.32 |
| New Orleans, Louisiana, USA | Dhamra , Odisha, India | Panamax | 65,000 | 36.63 |
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