European Coal Imports Set To Plummet By 60% In October

Authored by Tsvetana Paraskova via OilPrice.com,

European thermal coal imports are expected to dip this month by 60% compared to October 2022, due to low demand and ample stocks, according to preliminary data from Kpler cited by Montel on Thursday.

Total imports by the Netherlands, the UK, Germany, Italy, Spain, Belgium, and France are estimated to be around 2 million tons in October, down by 2.8 million tons compared to the same month of 2022, per the preliminary data from Kpler.

Ample thermal coal inventories and weak demand ahead of the peak winter heating season have depressed prices in recent months and purchases and imports into Europe have been in small quantities.

Even with low coal prices and rising natural gas prices in Europe, the fuel-switching to coal has not happened yet, a trader with a German company told Montel.

The share of coal in Europe’s power generation has been declining in recent years, with many countries pledging to phase out unabated coal use.

But last year’s energy and gas crisis has been keeping utilities and governments on edge and ready to have mothballed coal-fired power plants on stand-by in the coldest winter days to ensure the security of electricity supply.

Earlier this month, Germany’s government said it was bringing back online several coal-fired units for this winter in an attempt to save natural gas and avoid power supply shortfalls.

Several coal-fired blocks operated by RWE and LEAG at their Niederaußem, Neurath, and Jaenschwalde power plants will be temporarily reactivated until March 2024 as a precautionary measure to safeguard electricity supply in the coming winter, the Economy and Climate Action Ministry said, referring to a government decision to bring the coal-fired units online again.

Those coal units were already operational during the 2022/2023 winter when Germany was shocked into a severely reduced gas supply with the end of Russian pipeline deliveries. The backup coal capacity was put on stand-by this summer until the government now decided to reactivate them for the coming winter.

By Tsvetana Paraskova for Oilprice.com