• 11 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 11 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 12 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 13 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 13 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 14 hours VW Fails To Secure Critical Commodity For EVs
  • 15 hours Enbridge Pipeline Expansion Finally Approved
  • 16 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 17 hours OPEC Oil Deal Compliance Falls To 86%
  • 1 day U.S. Oil Production To Increase in November As Rig Count Falls
  • 1 day Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 5 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 6 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 7 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
Alt Text

Is South America Set For A Gold Rush?

A Chinese gold miner is…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Coal Investors Need to See This Chart

Sentiment in the thermal coal market is nearly as poor as it gets right now.

The mood has been further dampened this week by price cutting from Chinese coal producers. With sellers slashing prices in an attempt to clear out inventory.

That's led to an almost complete loss of appetite for imports into China. With buyers simply adopting a "wait and see" posture--looking for domestic supplies to get even cheaper.

But amid all the negativity, the data shows that the fundamentals for the global market are still strong. Driven by major supply issues looming in one part of the world: India.

Data released this week by the Press Bureau of India reveals that the supply-demand situation is growing worse here. With power plants across the country simply not being able to obtain all the coal they need to keep operations going.

The chart below tells the story. Showing coal deliveries by major producer Coal India to power users, as a percentage of total contracted volumes.

The numbers here suggest a growing supply crisis. For the most recent fiscal year (2013-14), for example, Coal India committed to deliver 412.3 million tonnes to power users. But was only able to come up with 353.82 million tonnes--resulting in a contract delivery rate of just 86%.

Dispatch coal volumes of India

And the numbers show that trend of under-delivery is only getting worse. In May of this year, Coal India

was only able to deliver 84% of the 35.92 million tonnes it had contracted to power plants. During April, the delivery rate came in at just 82%.

That's a large and widening gap between supply and demand across the country. With flagging production at existing coal mines, and problems in starting up new output increasingly pushing coal users toward imports as a go-to source.

That trend is going to continue for the foreseeable future. Which is why news emerged this week that India's power companies are aggressively seeking coal mining acquisitions in South Africa and Indonesia. Watch for more moves on that front over the coming months.

All of this remains a major bullish force for the global coal market. We'll see when surging import demand here starts to have an effect on international pricing.

Here's to meeting commitments,

By Dave Forest




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News