In Commodity News 04/05/2015
The UK’s rate of thermal coal burn in February fell by 6.8% month on month and 12.4% year on year to 3.62 million mt, a four-month low, according to data from the Department of Energy and Climate Change.
DECC said the on-year decline was due to outages at several power stations, the closure of Uskmouth and the partial closure of Ferrybridge C during 2014, as well as a second unit of Drax Power being converted to biomass and changes in the relative prices of coal and gas.
Thermal coal stocks at UK power generators at the end of February dipped by 1.9% on the month to 14.46 million mt, but were 26% higher than a year earlier and were the highest for this time of year since 2010.
Sources have said that the reason for the build-up in stocks in the first quarter was largely due to the introduction of a hike in the UK’s Carbon Price Support mechanism from GBP9.55/mt ($14.61/mt) of carbon in 2014-2015 to GBP18.08/mt in 2015-2016 from April 1, making it more expensive to procure and burn thermal coal.
Total February coal imports into the UK — including metallurgical coal for steel production — fell 11.2% on-year to 3.32 million mt, the DECC data said.
