UK coal inventories held by power companies fell in March to the lowest in almost three years after stocks were run down last year on weakening demand. Inventories were 9.6 million tonnes, the lowest since April 2008 compared with 11 million tonnes in February.
According to figures from the Department of Energy & Climate Change, they rose as high as 22.9 million tons in September 2009, the most for government data going back to 1995. Demand for coal weakened over the prior 12 months after Lehman Brothers Holdings Inc collapsed, triggering recession in Europe, the U.S. and Japan and cutting demand for coal and power.
Prices also encouraged buying, with coal delivered to northwestern Europe averaging USD 70.39 a tonne in 2009, According to IHS McCloskey, a researcher based in Petersfield, England. That compares with a USD 147.95 average in 2008 and USD 91.69 average last year, when global demand and prices were driven by China and India, the world’s most populous nations.
Amrita Sen an analyst said that “Clearly in 2009 prices were very cheap and, with coal, a lot of these are contracts and you can’t necessarily renege on them, so that swelled inventories.”
Mr Sen forecast that then demand fell quickly and sharply and in 2010 they ran down inventories. Generators will have to re-stock in 2011 and the UK will import 18.5 million tonnes of coal for power this year compared with 17 million tonnes in 2010.
According to figures from the Department of Energy & Climate Change, they rose as high as 22.9 million tons in September 2009, the most for government data going back to 1995. Demand for coal weakened over the prior 12 months after Lehman Brothers Holdings Inc collapsed, triggering recession in Europe, the U.S. and Japan and cutting demand for coal and power.
Prices also encouraged buying, with coal delivered to northwestern Europe averaging USD 70.39 a tonne in 2009, According to IHS McCloskey, a researcher based in Petersfield, England. That compares with a USD 147.95 average in 2008 and USD 91.69 average last year, when global demand and prices were driven by China and India, the world’s most populous nations.
Amrita Sen an analyst said that “Clearly in 2009 prices were very cheap and, with coal, a lot of these are contracts and you can’t necessarily renege on them, so that swelled inventories.”
Mr Sen forecast that then demand fell quickly and sharply and in 2010 they ran down inventories. Generators will have to re-stock in 2011 and the UK will import 18.5 million tonnes of coal for power this year compared with 17 million tonnes in 2010.
(Sourced from Bloomberg)
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