GERMANY'S COAL IMPORTS DOWN

PLATTS - 16 Jul 2020 - German 2020 coal imports could fall by up to 40%, with coal burn at record lows due to weak power demand caused by the coronavirus pandemic and better gas-fired plant economics due to low gas and high CO2 prices, German coal importers association VDKi said July 16.

"We estimate that imports of steam coal will amount to 17.5 million-22.5 million mt," VDKi Managing Director Franz-Josef Wodopia said at the half-year press conference.

Steam coal imports have already fell sharply from 43 million mt back in 2016 as the share of hard coal in the German power mix declined.

Hard coal plants only provided 6.4% of German electricity in the first half of 2020 down from 9.9% a year earlier, while the share of gas increased from 14% to 16%, data from utility group BDEW shows.

Renewables accounted for 50% of German power with the remainder coming from lignite and nuclear.

German parliament approved the coal exit law in June with a first coal closure for compensation auction for 4 GW planned for September.

The coal exit law caps hard-coal capacity at 15 GW by 2022 and 8 GW by 2030. Around 8 GW of German coal plant are in the higher 45% efficiency category including Uniper's new, 1.1-GW Datteln 4 coal plant commissioned in May as Germany's last coal plant.

The VDKi called for an "unbiased assessment" especially of modern, hard-coal plants in their compensation or conversion process during the phase-out.

World coal production meanwhile hit a record high of 7.3 billion mt in 2019, the VDKi estimates.

"COVID-19 does not appear to have had a significant impact on the supply/demand balance in the steam coal markets," it said adding that the "recovery of domestic price levels in China in June 2020 shows China's lead in economic recovery."

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