++++

REVISION OF THE COMMUNITY COAL MARKET FORECAST FOR 1980

THIS IS A REVISION OF THOSE PARTS OF THE REPORT ON THE COMMUNITY COAL MARKET IN 1979 AND FORECASTS FOR 1980 ( 1 ) , COMPILED AT THE BEGINNING OF THE CURRENT YEAR , WHICH REQUIRE COMMENTS IN THE LIGHT OF DEVELOPMENTS DURING THE FIRST HALF OF THE YEAR .

THE NUMBERING OF THE TEXT AND TABLES REPEATS THAT OF THE ORIGINAL DOCUMENT . THE TEXT IS DEVOTED PRIMARILY TO DRAWING CONCLUSIONS FOR THE WHOLE OF THE CURRENT YEAR ON THE BASIS OF PERFORMANCE DURING THE FIRST SIX MONTHS AND ATTEMPTS TO PROVIDE EXPLANATIONS WHERE PERFORMANCE IS LIKELY TO DIVERGE FROM THE ORIGINAL FORECASTS . THE TABLES GIVE FIGURES FOR THE FIRST SIX MONTHS OF THE CURRENT YEAR AND FOR PURPOSES OF COMPARISON , FOR THE SAME PERIODS IN 1978 AND 1979 .

I . SUMMARY

ACCORDING TO THE PROVISIONAL INFORMATION RECEIVED , COAL DEMAND APPEARS TO HAVE BEEN STABLE OR SLIGHTLY INCREASING IN THE COMMUNITY IN THE FIRST HALF OF 1980 . THE SITUATION WAS AFFECTED BY A LONG STRIKE IN THE STEEL INDUSTRY .

AS SHOWN IN TABLE 4 , STEEL AND , ABOVE ALL , PIG IRON PRODUCTION IN THE UNITED KINGDOM DURING THE FIRST SIX MONTHS OF THE CURRENT YEAR WAS MUCH LOWER THAN IN 1979 , BUT THIS WAS NEARLY COMPENSATED BY HIGHER PRODUCTION IN OTHER MEMBER STATES . A PARALLEL THOUGH LESS CLEARLY MARKED , SITUATION IS APPARENT FROM TABLE 8A SHOWING GROSS ELECTRICITY PRODUCTION .

ON THE SUPPLY SIDE , THE PICTURE IS TOTALLY DIFFERENT . COAL PRODUCTION IN THE COMMUNITY WAS OVER 4 MILLION TONNES HIGHER DURING THE FIRST HALF OF THIS YEAR THAN IN 1979 , DUE ALMOST ENTIRELY TO INCREASED OUTPUT IN THE UNITED KINGDOM . IN ADDITION , THERE WAS A FURTHER RISE OF SOME 10 MILLION TONNES IN IMPORTS FROM OUTSIDE THE COMMUNITY . FURTHERMORE , OTHER DEVELOPMENTS SUGGEST THAT COAL CONSUMPTION MAY BE SLIGHTLY BELOW THE 308 MILLION TONNES ORIGINALLY FORECAST , AND THAT COMMUNITY OUTPUT WILL BE ABOVE THE FORECAST 241 MILLION TONNES , WHILE IMPORTS FROM NON-MEMBER COUNTRIES SHOULD EXCEED THE EXPECTED LEVEL OF 65 MILLION TONNES .

THE BUILD-UP OF STOCKS MAY BE REGARDED AS IMPROVING THE PROSPECTS FOR THE COMMUNITY'S OVERALL ENERGY SUPPLY NEXT WINTER .

( 1 ) OJ NO C 174 , 14 . 7 . 1980 .

III . COAL DEMAND BY SECTOR

1 . STEEL INDUSTRY

( TABLES 4 AND 22 )

DURING THE FIRST HALF OF 1980 , CRUDE STEEL PRODUCTION AT 68,3 MILLION TONNES WAS 1,4 MILLION TONNES DOWN ON THE SAME PERIOD LAST YEAR . ALTHOUGH , PROJECTED OVER THE WHOLE YEAR , THIS MODEST DROP WOULD SUGGEST THAT THE 134,4 MILLION TONNES ORIGINALLY FORECAST FOR THE WHOLE YEAR WILL BE EXCEEDED , RECENT INDICATIONS LEAD TO THE OPPOSITE CONCLUSION . IN FACT , CURRENT PROSPECTS WILL RESULT IN STEEL PRODUCTION BEING CUT BACK BY CLOSE ON 11 % DURING THE SECOND HALF OF THE YEAR COMPARED WITH THE SAME PERIOD IN 1979 . THIS HAS RESULTED IN FORECASTS FOR THE COMMUNITY'S STEEL PRODUCTION IN 1980 TO BE REVISED DOWNWARDS TO A MAXIMUM OF 132 MILLION TONNES , ROUGHLY THE SAME LEVEL AS IN 1978 AND A DROP OF 6 MILLION TONNES FROM LAST YEAR'S FIGURE .

THE SHIFT IN STEEL OUTPUT FROM THE UNITED KINGDOM TO OTHER MEMBER STATES DURING THE FIRST HALF YEAR , DUE TO THE BRITISH STEEL INDUSTRY STRIKE , WAS EVEN MORE MARKED FOR PIG IRON . WHEREAS PIG IRON PRODUCTION IN THE UNITED KINGDOM WAS AT ONLY 38 % OF ITS LEVEL OF 1979 , EVERY OTHER MEMBER STATE SHOWED A RISE .

COKE CONSUMPTION IN BLAST FURNACES DURING THE FIRST HALF OF THE CURRENT YEAR WAS OF THE ORDER OF 24 MILLION TONNES , A SLIGHTLY LOWER FIGURE THAN MIGHT HAVE BEEN EXPECTED FROM THE LEVEL OF PIG IRON PRODUCTION AND DUE TO THE SHIFT OF OUTPUT AWAY FROM THE UNITED KINGDOM WITH ITS HIGH SPECIFIC COKE INPUT . FOR THE WHOLE YEAR , CONSUMPTION IS LIKELY TO BE SLIGHTLY LOWER THAN THE 47,8 MILLION TONNES ORIGINALLY FORECAST .

2 . POWER STATIONS

( TABLE 8 A )

GROSS ELECTRICITY PRODUCTION GREW BY 4,9 % IN 1979 , AS ESTIMATED IN THE ORIGINAL REPORT . HOWEVER , THE FIGURES FOR COAL CONSUMPTION AND THOSE FOR LIGNITE AND PEAT IN TABLE 8C SHOULD BE AMENDED AS FOLLOWS : COAL 176,2 MILLION TONNES , LIGNITE AND PEAT 124 MILLION TONNES .

AS REGARDS 1980 , THE VERY CAUTIOUS FORECASTS OF ONLY MARGINAL GROWTH IN ELECTRICITY PRODUCTION APPEAR TO BE BORNE OUT BY EVENTS SO FAR AND BY THE UNFAVOURABLE ECONOMIC PROSPECTS FOR THE REST OF THE YEAR . IN FACT , A SUBSTANTIAL DROP IN THE UNITED KINGDOM AND PROBABLY , A SLIGHT DROP IN GERMANY MAY MORE THAN COUNTERBALANCE MODEST GROWTH IN OTHER MEMBER STATES AND LEAD TO LOWER GROSS ELECTRICITY PRODUCTION IN THE COMMUNITY IN 1980 THAN IN THE PREVIOUS YEAR . THE PRINCIPAL REASONS ARE THE DEPRESSED LEVEL OF ECONOMIC ACTIVITY , THE SECONDARY EFFECTS OF STRIKES IN THE UNITED KINGDOM , A MILD WINTER AND , PROBABLY , ENERGY-SAVING MEASURES .

THE SHARE OF CONVENTIONAL THERMAL IN TOTAL ELECTRICITY GENERATION , WILL BE SUBSTANTIALLY LOWER , DUE TO AN EXPECTED EXTRA 7,1 TWH OF NUCLEAR GENERATION , MAINLY IN FRANCE , AND OF AN EXTRA 3,3 TWH OF HYDROELECTRIC GENERATION , RESULTING FROM CONSIDERABLE SNOW AND RAINFALL . IT APPEARS LIKELY THAT THESE FACTORS WILL BE REFLECTED IN A DROP IN OIL-BURN BUT THAT THE FORECAST LEVEL OF COAL CONSUMPTION AT AROUND 178 MILLION TONNES , MAY BE MAINTAINED .

IV . COMMUNITY COAL PRODUCTION

( TABLES 11 , 13 AND 14 )

THERE ARE STRONG REASONS FOR EXPECTING THAT COMMUNITY COAL PRODUCTION DURING THE CURRENT YEAR WILL EXCEED THE 241 MILLION TONNES INITIALLY FORECAST .

DURING THE FIRST HALF OF THE YEAR , THE FIGURES FOR BELGIUM , GERMANY AND FRANCE WERE BROADLY IN LINE WITH THE FORECAST . ON THE OTHER HAND , OUTPUT IN THE UNITED KINGDOM AT 65,6 MILLION TONNES WAS ALREADY 4,3 MILLION TONNES ABOVE THAT FOR THE SAME PERIOD IN 1979 , COMPARED WITH AN INCREASE OF 3 MILLION TONNES FORECAST FOR THE WHOLE YEAR . WHILE THERE ARE REASONS FOR EXPECTING NO COMPARABLE IMPROVEMENT IN PERFORMANCE DURING THE SECOND HALF OF 1980 , IT IS LIKELY THAT OUTPUT WILL AGAIN BE IN THE 59-60 MILLION TONNES REGION .

ACCORDINGLY , COMMUNITY COAL PRODUCTION COULD REACH ABOUT 243 MILLION TONNES DURING THE CURRENT YEAR , BUT A NUMBER OF FACTORS , INCLUDING THE UNPROMISING PROSPECTS OF THE STEEL INDUSTRY , MAY RESULT IN A LOWER FIGURE .

V . COAL PRICES

THERE HAS BEEN LITTLE IN THE WAY OF CHANGES IN LIST PRICES OF COMMUNITY COALS SINCE PUBLICATION OF THE ANNUAL REPORT . THOSE OF THE AACHEN AND SAAR COALFIELDS HAVE BEEN RAISED BY ABOUT 5 % AND 3 % RESPECTIVELY , HOWEVER , WITH EFFECT FROM 1 JANUARY 1980 .

THE COMMISSION'S INDICATIVE PRICE FOR NON-COMMUNITY COKING COAL PER TONNE CIF ARA HAS BEEN RISING FURTHER TO REACH US DOLLARS 69 BY 1 JULY 1980 , INCLUDING US DOLLARS 9 TRANSATLANTIC FREIGHT . THE LATTER REPRESENTS AN AVERAGE UNDER LONG-TERM CONTRACTS AND LIES WELL BELOW CURRENT RATES FOR SPOT CHARTERS , NOT INCLUDING DEMURRAGE .

AS MENTIONED IN THE ANNUAL REPORT , SOUTH AFRICA IS ACCOUNTING FOR A GROWING SHARE OF TOTAL COMMUNITY IMPORTS OF STEAM COAL . DURING THE EARLY PART OF THIS YEAR . SOUTH AFRICAN IMPORTS GREW BY A FURTHER 1,9 MUCH FASTER , NAMELY BY 3,4 MILLION TONNES . ADDITIONAL IMPORTS FROM THE USA , APPEAR TO HAVE BEEN MAINLY FOR POWER STATIONS .

THIS DEVELOPMENT , TOGETHER WITH WORLD-WIDE RISES IN FOB PRICES OF STEAM COAL AND HIGHER FREIGHTS , AGGRAVATED BY HIGH DEMURRAGE CHARGES DUE TO PORT CONGESTION IN CERTAIN AREAS , PARTICULARLY ON THE US EAST COAST , HAS FUELLED A CONTINUING UPWARD MOVEMENT IN CIF PRICES OF STEAM COAL IMPORTED INTO THE COMMUNITY FROM NON-MEMBER COUNTRIES . WHEREAS TOWARDS THE END OF 1979 , CIF ARA PRICES FOR STEAM COAL WERE STILL ON AVERAGE SLIGHTLY BELOW US DOLLARS 40 , CURRENT PRICES ARE NOW BETWEEN ABOUT US DOLLARS 45 AND US DOLLARS 55 , NOT INCLUDING DEMURRAGE .

VII . TRADE IN COAL AND COKE

2 . IMPORTS FROM NON-MEMBER COUNTRIES

INFORMATION ON CONTRACTS POINTS TOWARDS IMPORTS IN 1980 AT WELL ABOVE THE FIGURE OF 65,4 MILLION TONNES ORIGINALLY FORECAST .

IT IS ALMOST CERTAIN THAT IMPORTS FROM THE USA WILL BE ABOVE THE ORIGINAL EXPECTED FIGURE OF 14 MILLION TONNES . ON THE OTHER HAND , THE FORECAST RISE IN IMPORTS FROM AUSTRALIA WILL PROBABLY NOT MATERIALIZE , DUE IN PART TO STRIKES IN QUEENSLAND .

THERE HAS BEEN A SUBSTANTIAL RISE IN IMPORTS FROM POLAND DURING THE FIRST HALF OF THE YEAR COMPARED WITH THE SAME PERIOD IN 1979 , BUT THIS IS PROBABLY NO MORE THAN A REFLECTION OF DEPRESSED EXPORTS EARLY IN 1979 DUE TO VERY SEVERE WEATHER CONDITIONS . WITH THIS ADJUSTMENT , TOTAL IMPORTS FROM POLAND MAY TURN OUT TO BE NEARER LAST YEAR'S LEVEL OF ABOUT 15 MILLION TONNES THAN AT 19,8 MILLION TONNES INITIALLY FORECAST .

TAKING ALL THESE FACTORS INTO ACCOUNT , IMPORT THIS YEAR COULD EXCEED THE 65 MILLION TONNES FORECAST .

VIII . COAL AND COKE STOCKS

THE FIGURES OF COMMUNITY PRODUCERS' COAL STOCKS AT THE END OF 1979 GIVEN ON A PROVISIONAL BASIS IN THE ANNUAL REPORT ( TABLE 28 ) SHOULD BE AMENDED AS FOLLOWS :

( 1 000 TONNES )

BELGIUM*FRANCE*GERMANY*IRELAND*UNITED KINGDOM*COMMUNITY*

150*3 836*12 236*30*10 245*26 497*

THIS LEVEL WAS EXCEPTIONALLY LOW . SINCE THEN , THE STOCKS HAVE INCREASED BY ABOUT 7,5 MILLION TONNES , WITH THE UNITED KINGDOM ACCOUNTING FOR 4 MILLION TONNES . THE LEVEL REACHED AT THE END OF JUNE IS ONLY 2 MILLION TONNES HIGHER THAN THE JUNE 1979 LEVEL .

COKE STOCKS AMOUNTED TO 9,9 MILLION TONNES AT THE BEGINNING OF THE YEAR AND ARE NOW 8,2 MILLION TONNES ( PROVISIONAL FIGURE ) , AND THE UNFAVOURABLE PROSPECTS FOR THE STEEL INDUSTRY IN THE SECOND QUARTER OF THE YEAR DO NOT SUGGEST THAT THIS DROP WILL CONTINUE .

TABLE 4

CRUDE STEEL AND PIG IRON PRODUCTION

( IN 1 000 TONNES )

*JANUARY TO JUNE 1979*JANUARY TO JUNE 1980*DIFFERENCES*

***IN TONNES*IN % *

A . CRUDE STEEL*****

BELGIUM*7 068*7 269* + 201* + 2,8*

DENMARK*409*460* + 51* + 12,5*

GERMANY*22 581*23 067* + 486* + 2,2*

FRANCE*11 207*13 052* + 1 845* + 16,5*

IRELAND*36*23* - 13* - 36,0*

ITALY*12 069*13 806* + 1 737* + 14,4*

LUXEMBOURG*2 525*2 593* + 68* + 2,7*

NETHERLANDS*2 859*2 839* - 20* - 0,7*

UNITED KINGDOM*10 979*5 230* - 5 749* - 52,4*

COMMUNITY*69 733*68 339* - 1 394* - 2,0*

B . PIG IRON*****

BELGIUM*5 727*5 842* + 115* + 2,0*

GERMANY*17 081*17 832* + 751* + 4,4*

FRANCE*9 252*10 849* + 1 597* + 17,3*

ITALY*5 665*6 170* + 505* + 8,9*

LUXEMBOURG*1 953*1 995* + 42* + 2,2*

NETHERLANDS*2 381*2 396* + 15* + 0,6*

UNITED KINGDOM*6 466*2 453* - 4 013* - 62,1*

COMMUNITY*48 525*47 537* - 988* - 2,0*

TABLE 8 A

GROSS ELECTRICITY GENERATION

( IN TWH )

*JANUARY TO JUNE*ORIGINAL FORECAST 1980*DIFFERENCE IN %

1980/79*

*1979*1980***

BELGIUM*26,7*27,7*55,4* + 3,5*

DENMARK*12,6*12,9*25,5* + 2,2*

GERMANY*190,9*188,9*388,0 ( 1 )* - 1,1*

FRANCE*124,9*130,7*260,8* + 4,6*

IRELAND*5,7*5,6*11,6* - 1,9*

ITALY*92,1*94,2*190,5* + 2,3*

LUXEMBOURG*0,7*0,6*1,4* - 13,9*

NETHERLANDS*32,3*32,9*66,8* + 1,7*

UNITED KINGDOM*160,2*150,2*292,7* - 6,7*

COMMUNITY*646,9*643,5*1 292,7* - 0,5*

DIFFERENCES IN TOTAL DUE TO ROUNDING OFF .

DIFFERENCES IN % CALCULATED ON FIGURES IN GWH .

( 1 ) CURRENT FORECAST : 380,0 ( SEPTEMBER 1980 ) .

TABLE 11

HARD COAL PRODUCTION

( IN 1 000 TONNES )

*1*2*3*4*DIFFERENCE 2-1*DIFFERENCE 3-2*

*JANUARY TO JUNE 1978*JANUARY TO JUNE 1979*JANUARY TO JUNE 1980 PROVISIONAL*ORIGINAL FORECAST 1980*IN TONNES* % *IN TONNES* % *

BELGIUM*3 541*3 320*3 312*6 320* - 221* - 6,2* - 8* - 0,2*

GERMANY*45 458*47 745*47 900*93 500* + 2 287* + 5,0* + 155* + 0,3*

( NATIONALE REIHE ) * ( 42 167 ) * ( 43 994 ) * ( 43 800 ) * ( 86 000 ) ( 1 )* ( + 1 827 ) * ( + 4,3 ) * - * - *

FRANCE*10 996*10 332*10 094*17 750* - 664* - 6,0* - 238* - 2,3*

IRELAND*18*34*30*60* + 16* + 89,0* - 4* - 11,8*

UNITED KINGDOM*61 488*61 293*65 568*123 500* - 195* - 0,3* + 4 275* + 6,8*

COMMUNITY*121 501*122 724*126 904*241 130* + 1 223* + 1,0* + 4 180* + 3,4*

( 1 ) CURRENT FORECAST : 87 000 ( SEPTEMBER 1980 ) .

TABLES 13 AND 14

PERSONNEL EMPLOYED UNDERGROUND AND OUTPUT PER MAN/HOUR

*END JUNE*DIFFERENCES*

*1979*1980*ABSOLUTE* %

PERSONNEL ( IN 1 000S ) *****

BELGIUM*17,0*16,4* - 0,6* - 3,5*

GERMANY*119,4*122,3* + 2,9* + 2,4*

FRANCE*33,1*30,2* - 2,9* - 8,8*

IRELAND*0,4*0,4* - * - *

UNITED KINGDOM*185,0*185,0* - * - *

COMMUNITY*354,9*354,3* - 0,6* - 0,1*

OUTPUT ( IN KG ) *****

BELGIUM*269*265* - 4* - 1,5*

GERMANY*540*530* - 10* - 1,9*

FRANCE*336*368* + 32* + 9,5*

IRELAND* - * - * - * - *

UNITED KINGDOM*361*372* + 11* + 3,0*

COMMUNITY*407*415* + 8* + 2,0*

TABLE 22

COKE OVEN COKE PRODUCTION

( IN 1 000 TONNES )

*1*2*3*DIFFERENCE 2-1*

*JANUARY TO JUNE 1979*JANUARY TO JUNE 1980*ORIGINAL FORECAST 1980*IN TONNES*IN % *

BELGIUM*3 303*3 226*6 120* - 77* - 2,3*

GERMANY*12 966*14 155*27 000 ( 1 )* + 1 189* + 9,2*

FRANCE*5 706*5 802*10 250* + 96* + 1,7*

ITALY*3 639*4 090*7 200* + 451* + 12,4*

NETHERLANDS*1 233*1 214*2 700* - 19* - 1,5*

UNITED KINGDOM*6 153*5 200 ( 2)*12 975* - 953* - 15,5*

COMMUNITY*33 000*33 687*66 245* + 687* + 2,0*

( 1 ) CURRENT FORECAST : 29 000 ( SEPTEMBER 1980 ) .

( 2 ) ESTIMATE .

TABLE 26

IMPORTS OF COAL FROM THIRD COUNTRIES - PERIOD JANUARY TO JUNE

* ( IN 1 000 TONNES ) *

*TOTAL*OF WHICH*

**USA*AUSTRALIA*AF/S*POLAND*

A . 1979******

BELGIUM*2 593*891*207*864*352*

DENMARK*2 323* - *234*741*1 032*

GERMANY*2 982*716*392*381*1 041*

FRANCE*9 071*1 554*1 577*3 734*1 779*

IRELAND*420*20* - *5*375*

ITALY*4 947*2 359*547*533*858*

LUXEMBOURG*78*1* - *59* - *

NETHERLANDS*2 089*613*769*166*385*

UNITED KINGDOM*1 140*136*651*13*278*

COMMUNITY*25 643*6 290*4 377*6 496*6 100*

B . 1980******

BELGIUM*3 079*1 602*173*712*428*

DENMARK*4 334*364*311*1 312*2 001*

GERMANY*3 650*984*365*621*1 230*

FRANCE*11 527*3 572*863*4 487*2 211*

IRELAND*420 ( 1)*24* - *6*390*

ITALY*6 722 ( 1)*2 513*661*1 709*1 241*

LUXEMBOURG*65*36* - *27* - *

NETHERLANDS*2 419*1 084*502*132*607*

UNITED KINGDOM*3 485*1 483*1 612*32*257*

COMMUNITY*35 701*11 662*4 487*9 038*8 365*

C . INITIAL ESTIMATE 1980*65 400*14 200*10 200*16 600*19 800*

( 1 ) ESTIMATE

NOTIFICATION OF THE " IRENE SCIZIER " PRIZE

1 . THE COMMISSION IS TO AWARD THE " IRENE SCIZIER " PRIZE ON 20 JULY 1981 FOR A WORK AMONG STUDIES DEALING MORE SPECIFICALLY WITH THE DISSEMINATION OF INFORMATION ON AGRICULTURE , WITH THE COMMON AGRICULTURAL POLICY , OR WITH POLICY FOR THE DISSEMINATION OF INFORMATION ABOUT COMMUNITY AFFAIRS .

2 . THE PRIZE IS A SUM OF BFRS 75 000 .

WORKS SUBMITTED FOR CONSIDERATION MUST BE WRITTEN IN EITHER FRENCH , DUTCH OR DANISH . SUBMISSIONS MAY CONSIST OF A SINGLE WORK , A SERIES OF ARTICLES OR STUDIES ALREADY PUBLISHED , OR THE COMPLETE WORKS OF A CANDIDATE .

THE AGE LIMIT IS 35 , I.E . CANDIDATES MUST BE UNDER 36 ON THE CLOSING DATE FOR THE SUBMISSION OF ENTRIES .

3 . THE CLOSING DATE FOR SUBMISSION OF ENTRIES , WHICH MUST BE ACCOMPANIED BY A COPY OF THE CANDIDATE'S BIRTH CERTIFICATE , IS 7 MARCH 1981 ( DATE AS POSTMARK ) .

ENTRIES SHOULD BE SENT TO :

" IRENE SCIZIER " PRIZE ,

COMMISSION OF THE EUROPEAN COMMUNITIES ,

RUE DE LA LOI 200 ,

B-1049 BRUXELLES .

4 . ENTRIES WILL NOT BE ACCEPTED FROM OFFICIALS OR OTHER SERVANTS OF THE EUROPEAN COMMUNITIES .