In Commodity News 29/05/2015
The UK’s rate of thermal coal consumption in March fell 14% on the year to 3.76 million mt, but increased 3% on the month, according to data by the Department of Energy and Climate Change Thursday.
Thermal coal consumption in Q1 2015 was 11.3 million mt, 15% lower than the corresponding 2014 period, DECC said.
DECC said the on-year decline was due to closures at older power plants, as well as a second unit of Drax Power being converted to biomass last year and changes in the relative prices of coal and gas.
Thermal coal stocks at UK power generators at the end of March crept up 0.3% on the month to 16.57 million mt, and were 38% 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 mainly due to a hike in the UK’s Carbon Price Support mechanism from GBP9.55/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 March coal imports into the UK — including metallurgical coal — fell 30% on-year to 3.22 million mt, the DECC data said.
