font_preload
PL / EN
Coal Energy 22 July, 2020 12:00 pm   

The coronavirus stopped coal imports in Poland

3.25 million tons – that’s how much coal Poland bought abroad in the first four months of the year. This is a huge drop in comparison to previous years – writes Karolina Baca-Pogorzelska, contributor at BiznesAlert.pl.

Demand and production

The coronavirus hurt the coal sector not only in Poland, but also across the world. The demand for coal plummeted dramatically, but its production dropped as well. In Poland’s Silesia some mines were temporarily closed, which made it possible to contain the rapid growth of coal mounds for a while. According to the Industrial Development Agency’s data, in May the domestic producers finally managed to sell a little bit more coal than they extracted (a 0.3 m ton difference), which means that the growth of reservers was temporarily stopped. More recent data are unavailable. This also pertains to Eurostat. We made a comparison of coal imports to Poland between this year and a couple of years back. Currently, full data are available for only four months, but they do encompass April, which was the first full month impacted by the coronavirus. If this trend sticks, it is very possible that this year’s foreign purchases of the black gold will finally drop below 10 million tons.

This is because during the first four months Poland bought only 3.25 m tons of coal outside of its borders. Why ‘only’? If we examine the Eurostat data from the previous years, it is plain to see that import ran out of steam not only because of the coronavirus, but also because of the warm winter and the growing participation of renewable energy sources (RES) in Poland’s power system. Suffice it to say that after the first six months PV grew to over 2.1 GW of installed capacity. On top of that, power generation from coal has been systematically decreasing to about 70% (RES have priority in the system). Believing this trend is only temporary or blaming COVID-19 is just wishful thinking. Especially that thermal coal still dominates imports and coking coal, used for producing steel, is in the minority.

Last year between January and April, Poland imported 5.71 million tons of coal, a year earlier that figure was 5.66 million tons.
The situation gets even more interesting if we look at coal from Russia, which is the biggest exporter of coal to Poland. In this instance Eurostat provides data for the period between January and May and the drops are spectacular. During the first five months of this year, 2.7 million tons of the fuel arrived to Poland. In the same period last year the figure was 4.76 million tons, and in 2018, which was a record-breaking year (when the total import of hard coal to Poland reached almost 20 m tons) it was 5.05 m tons.

What about coal prices across the world? The quotes from 17 of July said a ton of coal in the ARA ports (Amsterdam – Rotterdam – Antwerp) cost USD 55.55, whereas at the end of January the price was at almost USD 60 (on 13 of July a similar price peak was visible at ARA). However, at the end of April the prices were significantly lower and oscillated around USD 47.5 per ton.

What can we expect from the second half of the year? Well, it’s 2020 so forecasting makes absolutely no sense. We do not know when the second wave of the pandemic will hit and how strong it will be. We also don’t know whether it will force Poland and other countries to suspend work in coal mines. We also don’t know what the demand for power will look like if there is a lockdown (because it’s difficult to believe it will be as big as in the spring). So for now any predictions about coal are unreliable, but that doesn’t mean we shouldn’t be talking about that sector’s future in Poland.



Shares