• 19 hours U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 21 hours Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 23 hours Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 1 day Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 1 day Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 1 day TransCanada Boasts Long-Term Commitments For Keystone XL
  • 1 day Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 2 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 2 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 2 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 2 days Venezuelan Output Drops To 28-Year Low In 2017
  • 2 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 2 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 2 days Kinder Morgan Delays Trans Mountain Launch Again
  • 2 days Shell Inks Another Solar Deal
  • 3 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 3 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 3 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 3 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 3 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 3 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 3 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 3 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 4 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 4 days Norway Grants Record 75 New Offshore Exploration Leases
  • 4 days China’s Growing Appetite For Renewables
  • 4 days Chevron To Resume Drilling In Kurdistan
  • 4 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 4 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 4 days Nigeria Among Worst Performers In Electricity Supply
  • 5 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 5 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 5 days Saudis To Award Nuclear Power Contracts In December
  • 5 days Shell Approves Its First North Sea Oil Project In Six Years
  • 5 days China Unlikely To Maintain Record Oil Product Exports
  • 5 days Australia Solar Power Additions Hit Record In 2017
  • 5 days Morocco Prepares $4.6B Gas Project Tender
  • 5 days Iranian Oil Tanker Sinks After Second Explosion
  • 8 days Russia To Discuss Possible Exit From OPEC Deal
  • 8 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
Alt Text

The Death Of Europe’s Coal Industry

A recent report suggests that…

Alt Text

Federal Regulators Deal Huge Blow To The Coal Industry

The Federal Energy Regulatory Commission…

Is A Coal Price Recovery Near?

Is A Coal Price Recovery Near?

Lower prices have had a mixed effect on commodities production. Metals like gold and iron ore have seen output stay stubbornly high -- with Platts reporting this week that iron ore exports from key producers Australia and Brazil are running near record levels, despite a plunge in prices.

Other metals like copper and platinum are starting to show production slowdowns. But news this week suggests that one commodity appears to be responding fastest to lower prices.

Thermal coal.

On Monday, the world's top coal-exporting nation, Indonesia, said that its production is in major decline. Having already fallen by double-digit percentages this year. Related: OPEC Keeps Up Production In August, Takes Over Market Share

Government statistics showed that Indonesia's coal production for January to August fell 15.4%, as compared to same period of 2014. With total production coming in at 263 million tonnes -- down from 311 million last year.

That means Indonesian producers have already taken nearly 50 million tonnes of supply off the market. And suggests that the full-year cut in production could be close to 75 million tonnes. Related: Midweek Sector Update: This Key OPEC Member Could Soon See Production Cuts

That's a significant amount for the global market. Especially given that Indonesia is one of the world's lower-cost production centers for coal -- and one of the few places that had been continuing to expand output over the last two years.

But that trend is now reversing. And if Indonesian miners are having trouble at today’s prices (which are running around $58 per tonne for the blended basket of Indonesian coals), it's a safe bet most of the world's coal miners are facing similar difficulties. Related:The Shale Delusion: Why The Party’s Over For U.S. Tight Oil

In fact, some estimates are that 80% of Indonesia's coal miners are now curtailing output. Suggesting that government projections on 2015 production -- which had been forecasting 400 million tonnes, down from 458 million in 2014 -- will likely have to be revised downward.

All of which shows this is a market that's quickly changing direction. It may take some time for price effects to trickle through, given the incredible ramp-up in Indonesian production of late (66% growth over the last five years) -- but the right things are starting to happen to seed a recovery.

Here's to mining the good stuff,

Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




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