International Coal Markets - Coal Research Forum · International Coal Markets World supply and demand ... Reserves of coal are evenly distributed around the globe N. America 122/10/7

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www.coalimp.org.uk

InternationalCoal Markets

Nigel YaxleyManaging Director, CoalImp

26th November 2008

Minerals Engineering SocietyNottingham 26th November 2008

Slide 2

InternationalCoal Markets

World supply and demand

Seaborne trade

Reserves and resources

International prices

World Energy Outlook

UK coal supplies

2

www.coalimp.org.uk

World Supply andDemand


Slide 4

Coal – the world’s fastestgrowing fuel

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

4500.0

19651967

1969

19711973

1975197

719

791981

19831985

198719

891991

19931995

1997

19992001

20032005

2007

Mill

ion

Ton

nes

Oil

Equ

ival

ent

Oil Coal Gas Nuclear Hydro

Source: BP Statistical Review 2008

3


Slide 5

China already dominatesworld demand…

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mill

ion

Tonne

sCoalEquiv

ale

nt

China

USA

EU25

Indi

a

Japa

n

Russ

iaSo

uthAf

rica

Oth

ers

Source: IEA Coal Information 2008

World Coal Consumption2007 (including lignite)


Slide 6

…and most of the world’scoal is produced ‘at home’

0

500

1000

1500

2000

2500

3000

Mill

ion

Tonnes

China

USA

India

Australia

Sout

hAfri

ca

Russ

ia

Indo

nesia

Poland

Kaza

khst

an

Colo

mbia

Ukraine

Othe

rs

Seab

orne

Trad

e

Global Hard CoalProduction in 2007


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Slide 7

0

1000

2000

3000

4000

5000

6000

2003 2004 2005 2006 2007

Mill

ion

Tonn

es

OthersUkraineColombiaKazakhstanPolandIndonesiaRussiaSouth AfricaAustraliaIndiaUnited StatesPR of China

China also drives hardcoal production growth…



Slide 8

…but second tier producersalso show interesting trends

0

50

100

150

200

250

300

350

400

450

500

2003 2004 2005 2006 2007

Mil

lion

To

nn

es

IndiaAustraliaSouth AfricaRussiaIndonesiaPolandKazakhstanColombia


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www.coalimp.org.uk

Seaborne Trade


Slide 10

World seaborne hard coaltrade continues to grow

448.9473.6 501.1

571.1607.0

190.8191.6

209.2

204.6

226.7

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2003 2004 2005 2006 2007

Mill

ion

Ton

nes

Coking CoalSteam Coal


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Slide 11

Hard coal trade patterns(IEA 2005) (million tonnes)


Slide 12

Japan182.3

Korea88.3

Taiwan68.9

India54.1UK

50.3China47.6

Germany46.3

USA32.9

Italy25.0

Spain24.4

Others271.9

Major coal importers in2007

Million Tonnes


– top 5 account for 50%

7


Slide 13

Australia243.6

Indonesia202.2Russia

100.2

South Africa66.7

Colombia67.2

China53.7

USA53.4

Canada30.4

Others99.9

Major coal exporters in2007

Million Tonnes


– top 2 account for almost 50%

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Reserves andResources

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Slide 15

Reserves of coal are evenlydistributed around the globe

N. America122/10/7

Africa34/16/13

MiddleEast0/103/66

Europe18/2/5

FSU107/17/48 Asia Pacific

137/5/13

S. & Cent.America

8/16/7

(billion tonnes oil equivalent)coal / oil / gas

Source: BP Statistical Review of World Energy 2008

Global EnergyReserves 2007


Slide 16

The top five countries have80% of proven reserves…

0

50

100

150

200

250

Bil

lio

nT

onn

es

USA

PRChi

naIn

dia

Russ

ia

Sout

hAfric

a

Aust

ralia

Ukra

ine

Poland

Braz

il

Kaza

khstan

Cana

da

United

King

dom

Source: BGR - Bundesanstalt fü rGeowissenschaften und Rohstoffe

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Slide 17

…whereas China andRussia have almost 80%of resources…

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5Tril

lion

Ton

nes

USA

PRCh

ina

India

Russ

ia

Sout

hAf

rica

Austra

lia

Ukra

ine

Poland

Braz

il

Kaza

khstan

Cana

da

Unite

dKi

ngdo

m

Reserves ResourcesSource: BGR

www.coalimp.org.uk

International Prices

10


Slide 19

0

50

100

150

200

250

Jan

07

Feb

07

Mar

07

Apr 07

May

07

Jun

07Ju

l07

A ug07

Sep

07

Oct07

Nov

07

Dec

07

Jan

08

Feb

08

Mar

08

A pr08

May

08

Jun

08Ju

l 08

Aug

08

S ep08

Oct08

Nov

08

$/t

onn

e

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

£/G

J

$/tonne £/GJ

Steam coal pricesdelivered to North-WestEurope – where next?

Source - MCIS


Slide 20

Coal prices are still highby historic standards…

0

50

100

150

200

250

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$/to

nn

e

International coal prices deliveredto North West Europe

Source - MCIS

11


Slide 21

…and remain well abovecash costs of production


Slide 22

Freight from Richards Bayto Rotterdam has crashed

0

10

20

30

40

50

60

70

Jan 07

Feb

07

Mar

07

Apr 07

May07

Jun 07Ju

l 07

Aug07

Sep07

Oct

07

Nov

07

Dec07

Jan08

Feb

08

Mar 08

A pr08

May08

Jun08Ju

l 08

Aug08

Sep08

Oct 08

Nov

08

$/To

nne

Freight Richards Bay - ARA

Source - MCIS

12

www.coalimp.org.uk

World EnergyOutlook


Slide 24

IEA projects world coaldemand increasing by61% to 2030(in reference scenario)

0

1000

2000

3000

4000

5000

6000

7000

8000

Mill

ion

To

nn

es

Co

alE

qui

val

en

t

2000 2006 2015 2030

Reference Scenario'550' Scenario'450' Scenario

+ 61%on

2005

27%DemandReduction

51%DemandReduction

Source: IEA World Energy Outlook 2008

13


Slide 25

USA59

CANADA23

BRAZIL22

MEXICO10

JAPAN162

KOREA127

AUNZ1

OECDEUR/EU27311

ETnonEU+ATE39

ME28

CHINA39

RUSSIA33

ATLANTICMARKET INDIA

84

ODA199OLAM

22

NAFR12

SAFR3

HARD COAL TRADE IN REFERENCE SCENARIO, 2030 (million tonnes)

KEY:

EXPORTS(e.g. 100 Mt)

IMPORTS into REGION or COUNTRY(e.g. 100 Mt)

REGION100

100

TO ASIAPACIFICMARKET

World Energy Outlook 2006, IEA“e” after tonnage means an estimated split between Atlantic and Pac ific markets

33

37e

6 3e

18e

20e

3e

13e

40e

112

90e

8e

4 7e7 8e

3 20e

95

30

110e

INDONESIA

5

3 May07

ASIA PACIFIC

MAR KET

Source:Notes:

17

Source: IEA

Coal Trade in ReferenceScenario 2030(million tonnes)

www.coalimp.org.uk

UK Coal Supplies

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Slide 27

Coal provided 36% of UKpower in 2007…

Coal36%

Gas41%

Nuclear16%

Oil1%

Others6%

Source - BERR


Slide 28

…with imports providingalmost three quarters oftotal supply

Russia20.3

USA2.5

Canada1.7

Colombia3.9

Australia4.7

South Africa7.7

UK17.0

Indonesia1.5

Others0.7

Source – BERR/HMRC

Million Tonnes

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Slide 29

How we got here – UKsteam coal supply anddemand

0

10

20

30

40

50

60

70

80

90

100M

illi

on

To

nn

es

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Steam Coal Demand UK ProductionSource - BERR


Slide 30

Contrasting supplies in2007 for steam coal andcoking markets

Russia South Africa ColombiaIndonesia USA Others

Canada

USAOthers

Australia

Steam Coal(35.0 Mt)

Coking Coal(7.9 Mt)

Source -HMRC

NB Pie charts toscale by area

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Slide 31

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Jan -0

5

Apr -05

Jul-0

5

Oc t-05

Jan-06

Apr -0

6

Jul-0

6

O ct-0 6

Jan-0 7

Apr- 0

7

Jul-0

7

O ct-0 7

Jan-

08

Apr-08

Jul- 0

8

Mo

nth

lyT

on

nag

e

RussiaColombiaUSAIndonesiaSouth AfricaOthers

The mix of UK steam coalimports has changeddramatically

Source - MCIS


Slide 32ATH Seminar30 October 2008

Steam coal imports in 2007used a wide range of ports

Source – EWS Energy/HMRC

Immingham

Hu ll

London

Medway

Avonmouth

Liverpool

Cl ydep ort

Leith

Tyne

Blyth

Tees

Grangemouth

NB Arrows to Scale

Newport

Rosyth

17


Slide 33

Summary Coal is the worlds fastest growing fuel

China is the major driver Seaborne trade is largely dependent on second

tier producers and consumers Coal reserves are abundant and distributed

around the globe But USA, China and Russia have the ‘lion’s share’

Coal prices have shown massive volatility in 2008 But are still high by historic standards

UK is a minor player on the world coal stage But remains the world’s fifth largest importer

www.coalimp.org.uk

Thank [email protected]

International Coal Markets - Coal Research Forum · International Coal Markets World supply and demand ... Reserves of coal are evenly distributed around the globe N. America 122/10/7

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