• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 10 hours Could Venezuela become a net oil importer?
  • 2 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 13 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 19 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 9 hours Gazprom Exports to EU Hit Record
  • 13 hours Why is permian oil "locked in" when refineries abound?
  • 3 hours Oil prices going down
  • 11 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 9 hours Could oil demand collapse rapidly? Yup, sure could.
  • 9 hours Oil Buyers Club
  • 13 hours EVs Could Help Coal Demand
  • 7 hours Saudi Arabia turns to solar
  • 1 day Teapots Cut U.S. Oil Shipments
  • 19 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 36 mins Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 1 day Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

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

Trending Discussions


Leave a comment

Leave a comment




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