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DOCUMENTS "COM"
COM (77)41
V ol.1977/0013

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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(77)41 final
Brussels ,25February 1977
THE COMMUNITY COAL MARKET SITUATION
(Communication bythe Commission totheCouncil )
(
COM (77)41final

THE COrOXSITT COAL MAR3GT SITTA.TIOT
CoT-Tunlcation byth<Co-Mission to •the Covmcll
Introduction
1 1 •
Coal isbyfar the Community 'sbiggest domestic energy source and
contributes around 20/ooftotal energy supplies .Itisvital tha£
production should bemaintained ,and sofar aspossible increased within
economically justifiable limits ,ifthe Community istoreduce its
energy import dependency below thecurrent 60level.Production ,
nowat223million tons peryear ,hasfallen bynearly 9^sinc «1973
andiswell below the 19^5 target of250Billion tons.
Initsmessage totheCouncil of9December 197^theCommission
analysed thesituation ,andpainted outthat the 19°5 target idl
endangered bythestresses anduncertainties for the coal industry
resulting from steep rises both instocks andincoal imports i*roa
outBide the Coomunity .
I
Clearly ,inpursuing the aims ofenergy policy ,abalance crust be
sought between theinterests ofcoal producers andcoal consul Irs.
(1)Coal tonnages arecalculated la representing 7000It/eal
per kg *
(2)Doc.COM (76)667final

-2-
Internal Community Situation
p^ime importance fortheCommunity 'senergy "balance :coking^coa ]for
/Χ Φ/ Λ·
//thesteel industry andsteam coalforelectricity gpr^ra^ion .^^1976,
consumption bytheformer amount^^to JJ^illion^r^ns andby^le latter
ft to119million tons ,or o£/4*ue£ consumpt.i6 /ibyconventional power /7/ ■" -plants ., ,<7 .v'^ */Æ j'4.Two^'pes ofcoal andtheir respective production andmarket of
p^ime importance fortheCommunity 'senergy "balance :cokina^oa ]for
>. , .5«Consumption bythestee' industry isdetermined primarily bythe
economic climate :it fallen by10million tons (13>)since 1973 .
Anoverwhelming proportion oftheintrar-Community trade ,amounting to
15million tons coal and6million tons ofcoke in1976 wasfor
consumption bythe steel industry .
Ontheother hand ,coal consumption forelectricity generation islargely
.determined bytheprices andavailabilitieis ofalternative forms of
primary energy ,bytheexistence oftherequisite plant andbythe
policies ofgovernments andpublic authorities .All these currently
favour coal consumption near thepoint ofproduction and offer little
scope atpresent forintra-Community trade .Indeed ,little such trade
1
hastaken place during the last years ^largely because Community Extraction
costs arehigher than forthird country supplies andarenotcompensated
forbylower transport costs forCommunity coal .
6.Duetothispattern ofconsumption ,theCommunity coal industry hissuffered
thefull impact oftherecession inthe steel industry without having
been able tobenefit substantially from therise incoal demand for
electricity generation .Asaresult ,producers *coal andcoke stocks
stood at21/5ofannual coal production attheendof1976 even though
Corrjnunity coal production haulfallen byclose on9%since 19731andstocks
continue toshow atendency torise .Ontheother hand ,imports from
third countries haveincreased by42$overthesaneperiod^.
1)Geestatistical annex .

3
Interrelation between Community Coal Production and Third Cc.ir.tri .Truants
Co>:r.rCo^l
7•Sovery significant developnents inthecase ofcoking coal for ^!he
ftteel industry areexpected during thenext fewyears .Imports Jiake
place aair.ly witiin the fraaework oflong>-tera contracts orcoapiLrable
arran^eaents .Quantities tend tobefairly stable throughout stiiel
industry trade cycles .
Eowever ,added tothese arespot offers froa suppliers outside t!ke
Cocaunity which exercise disproportionate downward pressures on
prices during periods when supplies exceed demand ,asduring the ^
current worldwide steel industry recession .Asthis islikely to
persist for some tine ,acontinued rise inthe Community coal industry*s
stocks ofcoking coal and coke oust beexpected inthe absence ofremedial
measures orofprice alignments .This threatens toInvolve the industry in
unacceptable losses .
9-Theburden either ofexcessive stocks orofheavy losses product
j.ressure3 for the curtailment both ofcurrent production and of
investment infuture productive capacity regardless oflor.g-terik
prospects .Asthe known economically exploitable supplies ofg<tod
coking coal throughout the world areliaited ,the emergence ofIk
sellers *market forthis quality oust beexpected ,resulting inprices
vhich arelikely tocontinue tomake Coaaunity production coapetitive
inthe long-tens .
Power Station Coal
TO.Thelargest proportional increases incoal consumption forelectricity
generation since 1973 have taken place outside the twoprincipal ,coal
producing member countries .Forthereasons indicated inparagraph 6f
these have largely been met from increased third country imports inspite
ofrising stocks ofCommunity supplies .

4
11.Sofar,thevorld narket inpower station coal hasnotreached t'k»
sise andorganization ofthat incoking coal .Although lor.g-tei'h
contracts areacquiring 1Rowing iaportar.ce ,deliveries ur.dershsrt -
ter=contracts orofspot quantities ,including quantities ofs-j-rplzs
coking coal ,continue toplay animportant part ,kmtheCo–ur.ity 's
power station coal isgenerally consumed close tothepoint ofproduction
andunder thesa=e national administration ,third country imports dor.ot
exercise thesase short-tera pressures onexisting Coaaucity producer /
consumer relationships asthose ofcoking coal ,butthey inhibit the
developaent ofintra-Cooaunity trade .
12.Jncontrast tothecoking coal market ,great uncertainties overhtxg
xheworldwide prospects ofderaand andsupplies ofpower station coal .
Although there areasple econonically recoverable reserves insaj.y part *.
i?ftheworld ,their exploitation requires much larger infrastructure
Investments than increased Comaunity production anddevelop-en *of
Lntr^-Co^aunity trade ,and issubject topolitical uncertainties .
Inaor^ecases these investments willbeaworthwhile rortriVj-tion to ^
thedevelopment ofthecountries concernes ,butthere will re.-r.ain
significant Community reserves which could andshould beeconomically
exploited .

-5-
Problems connected with Third Country Imports
13.The following conclusions arise from paragraphs 7-12
(a)Thepresent downward trend onthecoal market isaffectirg
only the Community 'scoal industry ,imports having grown in
relative and absolute terms .
(b)Spot imports ofcoking coal have hadadepressing effect onprices
ofdisposals from Community producers inthe circumstances ofthe
recession .
(c)Imports ofsteam coal have risen because ofrising power station
demand ,while Community coal supplies have not been able toacquire
larger market shares and intra^-Community trade has not b«len
practicable because ofhigh costs .
(d)Inview ofthehistory ofinstability ofsales ofCommunity
coal and the growing volume ofimports ,coal producers are
uncertain about future production plans and about investment
innew capacity .The short-term outlook isaggravated by
further accumulation ofstocks .

Co-r-T8ftlon Pr<r>03«.îa
14.TheCommunity nust continue toencourage theconansptlon ©fcoal ko
«-3toreduce oiliaports ,andimported coal hasenimportant role to
play ;the 19-5 target approved bytheCouncil in1974 *a*fordorestic
m
production of250million ton*andiaports of$0Billion tons .2ut in
view oftherecent tendency forimports torise while domestic production
falls ,theCommission believes that thesituation should bekept under
close review ,and intends totake thefollowing actions :
1* Ajmually ,tftreport indetail onthird country ccaj .iaports
andtoissuO forward assessments oftheCommunity coal carket
inthelight offorecasts ofCoaaunity production ,ofthe
development ofdifferent market sectors ,andofcoal iaports
from third countries .
*
2m Regularly toexaaine theforward assessments bTtheCcarranity coal
narket with high level representatives oftherieaber states with &
riew toendeavouring toarrive atcoaaon policies .
3» Totake appropriate initiatives toencourage themember states
'tointroduce automatic licencing procedures forcoal iaports
from third countries andtransmit probptly totheCommission
such information asitrequires about these iaports forthe
preparation ofitsreports andassessments . '
15.Thla 1«theainiaua action necessary toenable theCoSL.xJ.ty liokeep
awatch onthesituation *Iffurther developments shaw the r.<!ed for
further action ,these canbeconsidered attheappropriate tirie .
16.Measures tosupporll Coaaunity coal production ,andtoencoara ^intra -
Cocaunity trade incoal ,arebeing pursued separately .

Statistical Annex
Table 1shows theposition ofcoal intheprimary energy "balance sheet a
ofthe Keraber states ;detailed data for 1976 arenotyet available .
Tible 2shows coal consumption trends inthe fo^ar cain sectors :coking
plants (mainly thesteel industry ),power stations ,domestic andother
consumers .Leaving aside power statior.3 ,there have "been reductions in
"both disposals and consumption since 1973 »particularly ifthetrend of
coke stocks atcoking plants istaken into account (seeTable *)• In
the case ofthe coke market ,thefall inconsumption isadirect
consequence oftherecession inthesteel industry .Coal-bum inthermal
power stations waslarger inall member countries ,particularly soin
Germany and Prance .
Table 3Coal production has been declining continually since 1973 ,
partly because offalling sales andpartly asaresult ofstag^lating
productivity .
Tables d&5The figures ofrising stocks should beseen intile contert
offalling production .For the United Kingdoa about 8million tonnes of
power station stocks ,stored atthe KCB'sexpense ,should beadded to
Table 4tobring therelevant figures uptodate forthe end of1976 .
ofcoal importa
•rable 6shows thetrenc/during thepast four years andforecasts bythe
y.er:ber States for 1977 .According tothese ,total coal imports in1977
*ould be50/*upon1973 »inspite oflower overall demand for coal .
Tibl*3 7&3Thefigures forsteaa coal andother grades areestimates ,
asstatistics for theutilization ofimported coal bysectors of
consumption are available only for coking plants .Statistical returns
have long been made for coking plants but were not introduced for power
station supplies until 1976 .Itisnevertheless abundantly clear that
the sharp rise inimports isattributable to &large increase inthe
use ofsteam coal ,despite *drop intotal fuel consumption inthermal

power stations in1974 and1975 *However ,coking coal i=ports also
deviate significantly froa thefalling demand trend resulting iVoa
thedepressed condition oftheeteel industry .
Tables ?k10 Thedeliveries andpurchases ofhard coal andCcka in
intra-Cosiunity trade show thecontraction inthecoaaon market forcoal
in1975 1976 compared tothebase year of1973 *.
Table 11presents aconsolidated forecast oftheConnunity coal' aarket
in1977 based oninformation obtained from Xeaber States ar.d ccal
producers inNovesber /Deceaber 1976 .The"balance sheet "shovtf afurther
rise instocks totalling 8aillion tonnes ^including coke).Tiefollowing
cosaents should beDade :
2:Some figures maybeoptimistic asthetrend forthesteel industry
isstill uncertain .
Stknadditional 2aillion tonnes forstocking atpower stati<lns
(originally envisaged for1976 )naybepurchased bytheelectricity
generating industry .
FsDestocking 1.2million tonnes isanoptiaistic assumption 4hddepends
onasteel industry recovery by3 "to5/* Electricity deFrar.ce
bum theplanned 14.2 aillion tonnes .
G3:Higher production ,e.g. 127aillion tonnes will beachieved with
aaore effective productivity scheae .Ontheother hand ,disposals
••tothepower stations might belower by*■3million tonr.es .Inthe
event ofboth higher production andlower coal burn ,additional stocks
arising could reach 7million tonnes .
»4
Ifalladverse effects materialize thearithmetical result for theCoammity
would beanewrise incoal stocks by*11.4 aillion tonnes plus another
3million tonnes ofcoke (converted tocoal equivalent )thus increasing
total stocks atcollieries ,atcoal industry coke ovens andatpower stations
intheUnited Kingdom ,stored attheFCB'sexpense ,tosooe 71aillion
tonnes attheendof197T•

Tsi/bl*ll Cyopf ?Inltrid cornnr^frtlftn ofvrimrv rourcpw ofen*rrr ejj co-vl
(inBilliont.c.e.)
1973Coal tehare
in/•1974Coal ehare
in£1975Coal share
in£
2 I 66,4 *5.2 64,8 28,1 59.S I12* c
D< ?S,0 11,4 25,6 10,9 25.3 1?.3
D 379,8 j 22,4 372,4 23.2 345,5 1?,7
256,6 15.5 250,1 16,0 234,5 14,9
10,7 0,7 10,3 0,8 °i/rJ C,8
I ie?,6 6,0 183,1 6,7 181,7 6,2
L 7,3 49,3 7,9 49,3 6,4|43,8
87,8 5,1 86,0 4,8 * 83,9 4,2
318,2 36,1 306,6 33,5 2?1,3 35,8 '
1î A I 20,9 1.311,8 20,7 1.237,5 19.6
%
!
5/

(incilllon "tor.r.os :t«*t) •
 
1973 1974 1975 1976 iA'
Coke ovena 107,0 108.1 102.6 101,6
Power plants 127,2 118.7 123,5 146.9
Dooestio 2jf8 23,2 19,0 19,6
Others 42,3
«45,2 36,9 23,9
Total 300,3 295.2 232.0 292.0
(l)Provisional
%
*
»
i/

Table 3* Hard coal output (innilllon tor.nes ;t-t)
1973 1974 1975 1976 (1)
•B 8,8 8,1'ι
7,5s
7,2
103,7 101,5 99,2 95,3
? 25w 22,9 22,4 22,4
IRL Οιΐ 0,1 0,1 0,1
KL 1,8 0,8
C3 130,2 109,2 (2) 127,8 122,0
ECt
I270,3 24?,δ
\257,0 247,0
(1)Provisional
(2)Output affected byalners *rtrlk *
»
\
/
*
?/

4:Y.*r& coal .Total colliery stocks (eniofpfcrioi )-rillior .tenr.fs
/
I
I1973 1974 1975 1975 (1)
– <
0,2 I 0,2 0,8 :-1.0
S 9»o 2,4 9,3 11.9 (2)
F 3,4 3,2 5,5 4,1
0,4
C3 io,9 I6(0I1C,6
!6,9
EC 23,9 11,8 25,9
(1)Provisional
(2)ofwhich 3-8Billion tonnes Federal reserve
Table S*Coke oven coke .Total producers *stocks (er.dofperiod )–silli&Tt tonnes
1973 1974 1975 1976 (1)
,ΐ
3 0,? 0,3 0,1 0,2
D 7.3 1.7 8,? 12,2 (2)
0,5 0,3 1.1 2.2
I 0.7 0.7 1.1 0,8
KLI ^ I
C3 2,3 1.0 2.4 2,5
E3 11,0 4,0 12,9 17,9 J
(1)Provisional
(2)ofvhich 3.0million tonnes Federal reserve
è
t/

Table 6x%
Kird cenl irportn (inmillion -tonnes )
a)according tocountry ofdectinatioa
r–, i
I ι1973 1974 1975 1975 (1) 1977 (2)
i s 3,4 4,3 2,4 •3,5 3,1
DK 3,0 3,5. 4,1 3,6 4,4
D 4,5 4,8 5,8 5,0 5,?
7 5,4 8,8 10,9 13,5 16,6
IRL 0,6 0,8 0,5 0,4 0,4
I 8,7 9,3 9,6 9,4 10,1
l.'L 2,8 3,0 2,8 4,0 3,6
C3 1,4 3,5 5,0 3,0 2,3
EC 29,8 38,0 41,1 42,5 45,7
(1)Provisional
(2)Keaber Statea *forecasts
b)according to©ountry oforigin
1973 1974 1975 1976 (1) 1977
USA 10,1 12,7 13,8 14,5
PL 1?,3 15,3 14,6 15,1
ευ 3,7 4,1 3,7 3,8
AUS 2,2 3,8 *5,8 4,7
ZA •0,7 1,3 1,7 3,4
hers 0,8 .0,8 1,5 1,1
Total 29,8 38,0 41,1 42,5
(l)Provieional
/

ι
Tiabla 7* C3.1lrrror*s Taccording -to -type ofcoal finrilliort -terj.ei h
Entirat^g
1973 1974 1975 1976
- -- « àL7
Coking coal 17,0 19.4 17,7 18.9
Ste&a coaa 8,0 11,7 17,8 19,1
Others 4.9 6,9 5,6 4.4
I
Tota.1 2?,9 38,0
• •41,1 42,5
f/

flabl® 8:Kird coni innortg 1976,accordine toend c«»ctors
(inmillion tonnes )
Coke ovena Power pl&iita.■yni.iWiti
Others Γ–
i
Β 2,6 0,7 0,2 3,5
uZ , 0,1 3.5 3,6
2
I0,1 3,2 1,7 5,0
r - 4,3 7,5 1.7 •13,5
0,4 0,4
I 7,7 1,5 0,2 9,4
KL 2,8 1,1 0,1 4,0
C3I 1,3 1.6 0,1 3,0
EC 18,9 19.1 4,4 i 42,5
%
»
i/

Tablo Of'Ti'tra-Cor.r -UTr'tydeHv9ri«»e ofcoal fa)mnd co>e M(in1,000 ««->
1973 1974 1975 1^5 (1)
343 376 5CS 310
329 360 -236 300
10 6 i 10
13.829 16.636 13*418 12.J£5
7.417 8.036 $.ceo 4.765
816 529 461 CCQi*/"'
667 876454 j 26-0
23 46 25
.14
40 81 66
*0
1.203 • 836 260ι _
I
! 20
658 638 595 515
2.560 I1.426 1.897 1.6S5
78 569 393 200
<
18.751 19.826 16.590 14.625
9.199
i10.560 6.849 6.220EC
3)
F
J?.L
I
L
KL
C3
EG':1
:)
.1
;ί
s
's
:
(l)Provisional
$
i/

Table lOx Intra -Corrvjnl -tyreeel-ntc ofcoal (a;end !eeVe (t>)(jr>l.COC tor' .or)
LZ
3
I2L
I
L
KL
C2«
:]
î]
îl
«0
*)1973
3.P--7
950
6
ICS
3.090
5C7
7.C69
3.624
155
13
2.902
64
303
3.235
1.119
617
295
511974
5.162
1.334
12
10=
1.5CS
53?
7.57 ?
4.568
177
7
3.520
78
534
3.165
1.174
757
109
31973 (1
3.8:4
5r~
12
1C5
1.155
5C2
6.459
2.770
1?1
7
3.C53
121
477
2.332
1.202
413
1313.74 ?
ccr
10
έο
i.2:o
5.ic6
2c:>
10
3-cctf
4;i
54:>
2.15:1
76' :
23CÏ
27!»
EC ft
b)18.751
9.19919.626
IO.56O16.590
6.849l-.£2$
6.220
(l)Provisional
/

It
Taolo lit Fo.lf.rco l?77(inmillion tonrer .;tt)
é
Βm. D Ρ ■ IRL I L ■NL QB EC
Production 7,2 90,5 20,8 0,05 125,0 243,6
Recoveries and corrections' 0,T 6,3 1,6 1,6 10,2
Imports from third ,countries 3,1 4,4 5,2 16,6 •0,4 10,1 3,6 2,3 45,7
Receipts from other ECSCcountries 3,8 0,1 1,1 4,9 0,2 .3,0 0,6 1,2 0,1 (15,1 )
Total availabilities 14,8
*# 4,5 103,1 43,9 0,7 13,1 0,6 4,8 129,0 Σ95.5
Power stations 3,3 3,8 37,5 21,5 0,05 1,5ι
1.0 fio.6 liîQ .1
(mines ,public andautoproducers ),•»
Coke ovens 8,3 39,4- 14,5 11,1 3,7 23,4 100,4
Industry 1,0 0,5 2,4 2,8 0,1 0,2 0,6 7,9 15,5
Domestio 1.7 2,5 3,1 0,5 0,1 0,1 11,0 19,0
Miscellaneous 0,2 0,2 3,2 2,6 0,2 2,2 8,6
Total inland 14,5 4,5 85,0 44,5 0,7 13,1 0,6 4,8- » ■ ■ I
125,1 !
»292,8
Exports tothird countries 1,2 0,1.0,2 1.5
Deliveries toECSC countries 0,3 12,5 0,5 1,7 (15,1 )
Stock movements– -
!I ■ ■ ■I
I I
a)coal +4,4 -1,2 +2,0 +5,2
b)cokc-oven coko +2,0 +0,2 +2,2
I