Weekly Coal Index Report
China will be investing far more in coal power over the next five years, according to a government plan released Friday, that only modestly increased renewable ambitions. Environmentalists had been hoping China’s five-year NDP would provide a roadmap towards carbon neutrality by 2060.
However, the plan signals little urgency in cutting greenhouse gas emissions and revealingly also lacks a cap on total energy consumption. China plans to reduce carbon emissions per unit of GDP by 18%, being the same target as the previous five years. With overall economic growth likely around 6% in 2021, this allows for a net increase in carbon emissions. Sneaky, but clever.
Meanwhile, freight prices remain firm on both capesizes and panamaxes. Strength seems to be focused around Brazil in the Atlantic and Indonesia/China in the Pacific, in what is usually a quiet time of year.
In a briefing to parliament’s appropriations committee, Eskom has revealed it has been unable to renegotiate most of its identified high-cost coal contracts. Part of the deadlock has been reticence by suppliers to renegotiate whilst Eskom is seeking to cut monthly volumes, due to current high stock levels.
Eskom’s primary energy costs rose about 17% in 2019 with most high-cost coal contracts being less than two years long. One can only hope for a neutral, transparent spot market to emerge by then to assist the erstwhile power utility in reducing its costs.
The overall momentum pattern is still cross-current i.e. signal trend is still very positive whilst MACD bears down into negative territory. Just as the wind blowing opposite to the current creates choppy conditions, we would expect choppy sideways action to continue in the coal market.
However, as MACD is about to shift down into negative territory, we would expect downside moves to prevail for the next few weeks. Very rarely does coal momentum turn back up in positive territory. Besides, the bears haven’t even had a chance in the driver’s seat yet.
Thus, we would expect that a $80 price handle is more likely than $90 in the next few weeks, although $100 by Q3 is not out of the picture as the market and momentum subsequently recover.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation