Facing the increasing demand for coal industry to supply coal for thermal power and other industries. In addition to that, there is a shortage of the world’s coal supply, and domestic coal mining is still limited. This has caused certain difficulties for Vietnam’s coal industry in particular and the world in general.
The latest Vietnam coal industry overview 2023
Vietnam coal supply 2023
Vietnam’s coal supply is stable. Coal mines in Quang Ninh, Red River Delta, Bac Kan, Thai Nguyen, Song Da, Song Ca, Na Duong provide large coal output for the whole country. Most of the coal in Vietnam is anthracite. This is a coal stream with a stable % of carbon, over 80%, distributed mainly in Quang Ninh province. Bituminous and subbituminous coal accounted for the second largest proportion.
According to VIRAC’s report, coal mining output in the first quarter of 2023 decreased slightly compared to the same period in 2022. Coal mining output is forecasted to increase in the coming months. Normally, coal mining output reaches the highest level in April – May. This is the preparation period for the peak of summer heat in June and July.
According to the general report, in the first 3 months of the year, TKV Group produced 9.5 million tons of raw coal, reaching more than 24% of the year plan, equaling 90% of the same period last year. Finished clean coal reached nearly 10 million tons, equal to about 25% of the plan and nearly equal to the same period last year.
As reported by VIRAC
With the ongoing power shortage across the country due to the current hot weather, a sufficient supply of coal for thermal power is an essential need. However, Vietnam still has to import coal to ensure enough coal for electricity production.
Vietnam coal demand 2023
In Vietnam, coal mainly serves industries (electricity, fertilizer, cement, metallurgy…). Coal demand for electricity production in Vietnam is currently at a high level, coal-fired power currently accounts for more than 30% of the country’s total power capacity and plays an important role in ensuring national energy security. The high demand for coal consumption for electricity production in the peak months of the hot season is the driving force for coal mining enterprises to boost production to ensure that there is no shortage of coal.
As reported by VIRAC
Currently, thermal power is still the main coal consuming industry of Vietnam, up to 73.2%. Since coal-fired power is still one of the main sources of electricity mobilization, it is a source of support when hydroelectricity faces difficulties due to drought.
Vietnam coal price 2023:
Although the input supply is limited and the demand for coal for power generation is increasing, the price of coal in Vietnam remains at 1.5 million VND/ton, almost unchanged compared to previous years. To achieve this, the state has taken measures to support the coal industry to ensure the stability of electricity production and electricity prices.
The latest global coal industry overview 2023
World coal supply in 2023:
The world coal supply is at a high level. According to VIRAC’s report, the world coal production will reach about 8.5 billion tons in 2023. In response to the price increase and the shortage of global coal supply, China and India, two coal producers. largest in the world, is actively boosting production. In particular, India’s mining output is expected to have the highest increase.
According to the aggregate report, coal exporters such as Indonesia and Australia are expected to increase their exports to supply the higher demand of some Southeast Asian countries to offset the decrease in Russian supply. According to the same source, the supply from Australia is expected to increase by 7.8% and from Indonesia by 2.4%. Meanwhile, imports to Asia increased by 2.3% and exports to Europe decreased by about 15%.
World coal demand in 2023:
According to a VIRAC report, world coal demand will increase by 1.2% in 2023, surpassing 8 billion tons in a year for the first time. The biggest increase in coal demand this year is in India, followed by the European Union and China. This consumption forecast will remain in place in the coming years, in the absence of stronger efforts to accelerate the transition to clean energy.
China and India are also the two countries with the largest demand for coal in the world. These are two densely populated countries, industries still have to depend on energy from coal without other alternative energy sources.
Evolution of world coal price 2023:
In the first half of 2023, the world coal price showed no signs of cooling down, causing businesses to suffer a lot. According to the aggregate report, the Newcastle standard coal price index will reach about 175-212 USD/ton in 2023, higher than the average of 86 USD in the previous decade. After the conflict in Ukraine, down more than 50% from the peak of September 2022 of 440 USD/ton.
According to a report by VIRAC, Australia’s metallurgical coal price at the end of 2022 has increased due to limited supply and customers looking to replace Russia’s supply in 2023. However, as the world coal supply gradually comes in stable, coal prices in Australia in the first quarter of 2023 have decreased compared to the same period in 2022.
Also according to VIRAC’s report, in 2022, coal prices in South Africa will increase sharply mainly due to high demand, especially in Europe – where energy supplies are disrupted due to sanctions on Russia when the conflict occurs. However, as European countries gradually stabilized energy supplies, in the first quarter of 2023, coal prices in South Africa showed signs of cooling down.
Coal industry outlook from now to the end of 2023
Coal industry supply outlook from now to the end of 2023
According to VIRAC’s report, the mining output in 2023 is expected to increase compared to the same period in 2022. Especially in the summer months, under the impact of El Nino weather conditions in 2023, the North is suffering from hot weather with little rain, favorable for coal mining activities.
This brings promising development of coal supply. Also according to VIRAC’s report, the total global coal supply is expected to remain around 8 billion tons in 2023, of which coal exports from major suppliers (especially Australia and Indonesia) are expected to continue. continue to increase this year.
Outlook for coal consumption from now to the end of 2023
According to VIRAC’s report, coal consumption prospects for thermal power plants are expected to increase as hot weather this year will reduce hydropower output. Many hydroelectric reservoirs are having very low water return, not providing enough electricity as planned. Data from hydropower companies show that, due to the impact of El Nino, the amount of water in hydropower reservoirs in the North continues to be poor, the water flow is only about 70-90% compared to the average of the years.
The prospect of coal consumption for the cement industry is also at a high level. Coal is an important input fuel for the cement industry: coal accounts for about 30-40% of the cost of cement production. From now to the end of 2023, coal consumption demand for cement production will increase when the cement supply is replenished.
The demand for coal for steel production will not grow when the Vietnamese steel market is relatively gloomy. Large steel enterprises had to partially stop operating in the first quarter of 2023. Hoa Phat, Pomina Steel and many other enterprises in the steel industry closed their furnaces in Q4/2022 and only partially reopened them earlier this year. The process of restarting the steelmaking furnace will take place gradually in 2023 & 2024.
In general, the demand for coal from now until the end of the year will continue to increase. Coal mining enterprises need to operate at full capacity to provide enough coal for production activities.
Coal price outlook from now to the end of 2023
From now until the end of the year, the coal price outlook is relatively positive. The price of domestic coal sold to thermal power plants will remain unchanged due to the government’s policy to stabilize electricity prices.
According to VIRAC’s report, the world coal price from now to the end of the year is expected to cool down compared to the same period in 2022. This is a good prospect in the situation that the world coal price is always high. The reason for this expectation is that the demand for coal in other markets is decreasing. EU countries are aiming to reduce energy consumption as most EU members report a reduction in electricity demand of more than 5% in 2023.
Coal and gas mining is expected to fall further if factories France’s nuclear power is back up and running as scheduled this year. Meanwhile, plans to restart coal power remain dormant. Despite fears of a major energy crisis leading some EU members to plan to restart coal power plants in the winter of 2022. Meanwhile, new coal power plants operate only with about 27% of maximum capacity.
The above information is updated from “Coal industry report Q1/2023“. The report provides full information on macroeconomics, export trade supply and demand of the coal industry in Vietnam and in the world, relevant information and forecasts from the latest updated data.
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