Information from the Commission - The market for solid fuels in the Community in 1997 and the outlook for 1998
Date: 1998-04-29
Institutions: European Commission
Subjects: EU situation, economic forecasting, energy consumption, energy production, fuel, single market

29.4.98

EN

Official  Journal  of  the  European  Communities

C  131/5

The  market  for  solid  fuels  in  the  Community  in  1997  and  the  outlook  for  1998

(98/C  131/04)

1.(cid:217)This  preliminary  report  analyses  the  forecasts  for
1997  and  1998  prepared  by  the  Member  States  and
forwarded  to  the  Commission  in  November  1997.  Its
purpose 
the  ECSC  Consultative
Committee  and  the  circles  concerned  with  the  most
up(cid:220)to(cid:220)date  information  on  the  developments  in  the
Community  solid  fuels  market.

to  provide 

is 

A  new  report  on  the  market  for  solid  fuels  in  the
Community  in  1997  and  the  outlook  for  1998  will  be
drawn  up  during  the  first  quarter  of  1998.

2.(cid:217)Economic  activity  in  1997  is  expected  to  show  a
strong  rebound  from  the  estimated  1,8(cid:216)%  growth  in
1996,  mainly  thanks  to  sustained  export  growth  and
a  pick(cid:220)up  in  private  consumption  in  some  Member
States.  For  1997  on  average,  real  GDP  is  projected
to  rise  by  2,6(cid:216)%  in  the  Community  as  a  whole.
There  are 
increasingly  convincing  signs  that  the
acceleration  in  activity  will  continue  in  1998,  as
favourable  developments  are  already  seen 
in  the
domestic  economy  because  of  continued  budgetary
consolidation,  appropriate  wage  trends,  sustainably
low 
interest  rates,  returning  consumer  confidence
and  high  profitability  of  investment.  GDP  should
reach,  on  average,  a  rate  of  3(cid:216)%  in  1998.

3.(cid:217)With  respect  to  energy  demand,  provisional  figures
for  the  first  half  of  1997  point  to  a  decrease,  in  terms
of  gross  inland  consumption,  of  some  1,2(cid:216)%  for  the
Community  as  a  whole,  due  to  the  warmer  weather.

by 

By  energy  source,  only  nuclear  and  hydro  have
increased, 
respectively,
compared  to  the  same  period  of  the  previous  year,
whilst  oil  consumption  has  remained  roughly  static.
All  the  other  energy  sources  have  seen  consumption

2,4(cid:216)% 

1,4(cid:216)% 

and 

decline,  the  most  significant  being  the  5,2(cid:216)%  decline
in  solid  fuels  (5,1(cid:216)%  decline  for  hard  coal  and  5,6(cid:216)%
decline  for  lignite  and  peat)  and  the  3(cid:216)%  decline  in
natural  gas.

the 

in  mind 

For  1998,  bearing 
anticipated
performance  of  the  economy  and  assuming  constant
weather  conditions,  energy  demand  forecasts  suggest
an  increase  of  1,8(cid:216)%.  With  respect  to  solid  fuels,
however,  the  demand  for  both  hard  coal  and  lignite
could  decrease  by  4(cid:216)%  and  2(cid:216)%  respectively.

4.(cid:217)Community  hard  coal  production  still  continues  to
be  affected  to  varying  degrees  by  restructuring,
rationalisation  and  modernisation  plans;  hard  coal
production  in  the  Community  for  1997  is  expected
to  have  dropped  by  3,6  million  tonnes  ((cid:134)(cid:216)2,9(cid:216)%)  to
123,1  million  tonnes,  compared  to  1996.  All  coal
producing  Member  States  are  expected  to  witness  a
decline  in  production,  varying  from  France  ((cid:134)(cid:216)1,3
million  tonnes,  (cid:134)(cid:216)18,2(cid:216)%),  through  Germany  ((cid:134)(cid:216)1,2
million  tonnes,  (cid:134)(cid:216)2,2(cid:216)%)  and  the  UK  ((cid:134)(cid:216)0,9  million
tonnes,  (cid:134)(cid:216)1,8(cid:216)%)  to  Spain  ((cid:134)(cid:216)0,3  million  tonnes,
(cid:134)(cid:216)1,4(cid:216)%).

tonnes 

((cid:134)(cid:216)12,3(cid:216)%) 

For  1998,  current  forecasts  show  a  drop  of  some
15,2  million 
to  108  million
tonnes.  The  United  Kingdom  is  expected  to  account
for  the  bulk  of  the  decrease,  nearly  12,2  million
tonnes  ((cid:134)(cid:216)25,5(cid:216)%),  as  the  producers  respond  to  the
contraction  of 
the  electricity
generating  sector  due  to  the  penetration  of  gas.
Germany  expects  to  reduce  hard  coal  production  by
just  over  2  million  tonnes  ((cid:134)(cid:216)3,9(cid:216)%),  France  by  0,6
million  tonnes  ((cid:134)(cid:216)9,3(cid:216)%)  and  Spain  by  0,4  million
tonnes  ((cid:134)(cid:216)2,3(cid:216)%).

their  market 

in 

Comparison  of  the  main  features  of  the  solid  fuel  market

(million  tonnes)

1996
actual

1997
estimates

1998
forecast

1997/96
(%)(cid:216)(**)

1998/97
(%)(cid:216)(**)

HARD  COAL

Resources

-(cid:217)Production

-(cid:217)Recoveries

126,8

123,1

108,0

(cid:134)(cid:216)2,9

(cid:134)(cid:216)12,3

3,0

2,5

2,2

(cid:134)(cid:216)16,1

(cid:134)(cid:216)11,9

-(cid:217)Imports  from  third  countries

141,2

145,5

142,7

+3,0

(cid:134)(cid:216)2,0

Total

270,9

271,1

252,9

+0,1

(cid:134)(cid:216)6,7

C  131/6

EN

Official  Journal  of  the  European  Communities

29.4.98

Comparison  of  the  main  features  of  the  solid  fuel  market

(million  tonnes)

1996
actual

1997
estimates

1998
forecast

1997/96
(%)(cid:216)(**)

1998/97
(%)(cid:216)(**)

Deliveries

-(cid:217)To  coking  plants

-(cid:217)To  power  stations(cid:216)(*)

-(cid:217)To  others

-(cid:217)Exports  to  third  countries

Total

COKE

Resources

-(cid:217)Production

-(cid:217)Imports  from  third  countries

Total

Deliveries

-(cid:217)To  steel  industry

-(cid:217)Other  deliveries  within  the

Community

-(cid:217)Exports  to  third  countries

Total

LIGNITE

Resources

54,2

185,2

32,0

0,3

271,8

40,3

6,5

46,8

41,8

5,5

0,4

47,6

53,3

182,9

32,0

0,5

268,7

39,9

7,4

47,3

42,3

5,6

0,3

48,2

51,4

161,8

30,3

0,5

244,0

39,4

7,2

46,6

42,1

5,2

0,4

47,7

(cid:134)(cid:216)1,7

(cid:134)(cid:216)1,3

(cid:134)(cid:216)0,1

+41,6

(cid:134)(cid:216)1,2

(cid:134)(cid:216)3,5

(cid:134)(cid:216)11,5

(cid:134)(cid:216)5,4

+9,4

(cid:134)(cid:216)9,2

(cid:134)(cid:216)0,9

+13,9

+1,1

(cid:134)(cid:216)1,3

(cid:134)(cid:216)2,1

(cid:134)(cid:216)1,4

+1,2

(cid:134)(cid:216)0,3

+2,1

(cid:134)(cid:216)25,3

+1,1

(cid:134)(cid:216)6,3

+22,6

(cid:134)(cid:216)0,9

-(cid:217)Production  and  imports

261,1

249,7

244,2

(cid:134)(cid:216)4,4

(cid:134)(cid:216)2,2

Deliveries

-(cid:217)To  briquetting  plants

-(cid:217)To  power  stations

-(cid:217)Others  (incl.  exports  to  third

countries)

Total

27,5

229,0

4,0

260,6

23,1

223,0

3,2

249,4

18,6

222,7

2,8

244,1

(cid:134)(cid:216)16,0

(cid:134)(cid:216)2,6

(cid:134)(cid:216)20,3

(cid:134)(cid:216)4,3

(cid:134)(cid:216)19,5

(cid:134)(cid:216)0,1

(cid:134)(cid:216)13,5

(cid:134)(cid:216)2,1

PEAT

Resources

-(cid:217)Production  and  imports

14,3

13,3

13,1

(cid:134)(cid:216)7,1

(cid:134)(cid:216)1,6

Deliveries

-(cid:217)To  briquetting  plants

-(cid:217)To  power  stations

-(cid:217)Others  (incl.  exports  to  third

countries)

Total

1,7

10,4

2,3

14,3

2,5

8,1

2,5

13,1

2,7

8,0

2,4

13,1

+53,5

(cid:134)(cid:216)21,5

+8,9

(cid:134)(cid:216)8,0

+5,4

(cid:134)(cid:216)1,3

(cid:134)(cid:216)4,1

(cid:134)(cid:216)0,5

(!) The  sums  may  not  add  up  due  to  rounding.
(*)
(**)(cid:217)The  variations  are  calculated  in  kt.

Including  industrial  and  pithead  power  stations.

29.4.98

EN

Official  Journal  of  the  European  Communities

C  131/7

5.(cid:217)In  1997, 

in 

tonnes,  deliveries 

to  172,9  million 

internal  hard  coal  deliveries 

the
Community  could  total  268,2  million  tonnes,  which
is  nearly  3,3  million  tonnes  down  on  the  previous
year.  Reductions  occurred  in  nearly  all  the  consumer
in  deliveries  to  public
sectors,  most  particularly 
power  stations,  which  fell  by  2,9  milion  tonnes
((cid:134)(cid:216)1,7(cid:216)%) 
to
coking  plants  ((cid:134)(cid:216)0,9  million  tonnes,  (cid:134)(cid:216)1,7(cid:216)%)  and
deliveries  to  other  industries  ((cid:134)(cid:216)0,8  million  tonnes,
(cid:134)(cid:216)3,9(cid:216)%),  although  deliveries  for  autogeneration  use
could 
tonnes
increase  by  nearly  0,4  million 
(+(cid:216)6,8(cid:216)%).  Deliveries  to  the  iron  and  steel  industry
also  grew  (+(cid:216)1,2  million  tonnes,  +(cid:216)14,7(cid:216)%).  By
Member  State,  the  most  significant  decreases  are
expected 
in  the  United  Kingdom  ((cid:134)(cid:216)3,0  million
tonnes),  Germany  ((cid:134)(cid:216)2,2  million  tonnes)  and  France
((cid:134)(cid:216)1,7  million  tonnes),  countered  by  small  increases
in  Spain  (+(cid:216)1,4  million  tonnes),  Finland  (+(cid:216)0,8
million  tonnes)  and  Italy  (+(cid:216)0,6  million  tonnes).

With  respect  to  the  stocks  of  hard  coal,  there  is
expected  to  be  a  slight  increase  in  stocks  at  the
producers 
the  United
in  Germany,  Spain  and 
Kingdom,  whilst  coal  stocks  with  the  electricity
producers  could  increase  from  some  50,5  million
tonnes  to  53,3  million  tonnes,  mainly  as  a  result  of
the  higher  stocks  being  held  by  the  UK  generators.

internal  hard  coal  deliveries  are
For  1998,  total 
expected  to  drop  by  some  24,7  million  tonnes  to
243,5  million  tonnes.  The  majority  of  this  drop  (21,1
million  tonnes,  or  nearly  86(cid:216)%  of  the  total  decrease)
will  be  from  the  reduction  in  deliveries  to  the  power
stations.  Industrial  use  may  drop  by  some  0,9  million
tonnes,  while  deliveries  to  the  domestic  market  are
expected  to  reduce  by  0,8  million  tonnes,  although
there  may  be  a  very  small  increase  in  deliveries  to
the  iron  and  steel  industry,  of  just  over  0,1  million
tonnes.  By  country,  the  main  reductions  are  foreseen
in  the  United  Kingdom  ((cid:134)(cid:216)15,5  million  tonnes),
France  ((cid:134)(cid:216)4,3  million 
tonnes),  Denmark  ((cid:134)(cid:216)3,0
million  tonnes)  and,  to  a  lesser  extent  in  Portugal
((cid:134)(cid:216)1,0  million  tonnes)  and  Belgium  ((cid:134)(cid:216)0,5  million
tonnes).

in 

the 

trends 

largely  determines 

The  electricity  generating  sector,  as  the  main  coal
consumer, 
the
deliveries  of  hard  coal.  However,  it  is  important  to
note  that  the  quantitative  projections  in  coal  use
need  to  be  treated  with  considerable  caution,  since
the  national  analyses  used  to  produce  the  figures
tend  to  treat  coal  as  the  "residual  fuel’  required  to
supply 
after
determined  amounts  available  from  other  fuels  or
supplied.  Therefore,
energy 
variations  in  the  production  of  hydro,  or  in  the
performance  of  nuclear  plants  can  introduce  large
changes  in  the  projections  for  coal.  Having  said  that,

sources  have  been 

energy  demand 

projected 

total 

there  is  no  doubt  of  the  increasing  penetration  of
natural  gas  to  the  detriment  of  solid  fuels,  especially
in  the  United  Kingdom.

6.(cid:217)With  respect  to  the  electricity  generating  industry,
total  electricity  generation  could  decrease  by  around
1,5(cid:216)%  during  1997  compared  to  1996.  Whilst  gas,
nuclear  and  hydro  generated  electricity  can  be
expected  to  increase,  this  will  be  more  than  offset  by
the  decrease  in  electricity  generation  from  oil,  coal
and  lignite.

Hard  coal  deliveries  to  public  power  stations  could
fall  by  2,9  million  tonnes  during  1997  compared  to
1996,  with  the  main  decreases  expected 
in  the
United  Kingdom  ((cid:134)(cid:216)2,8  million  tonnes),  Germany
((cid:134)(cid:216)2,1  million  tonnes)  and  France  ((cid:134)(cid:216)2,0  million
tonnes).  These  more  than  offset  the  smaller  increases
expected  in  Spain  (+(cid:216)1,4  million  tonnes),  Finland
(+(cid:216)0,9  million  tonnes),  Italy  (+(cid:216)0,6  million  tonnes),
Denmark 
tonnes)  and  Portugal
(+(cid:216)0,4  million  tonnes).

(+(cid:216)0,4  million 

Current  1998  forecasts  indicate  a  potential  drop  of
almost  20  million  tonnes,  of  which  over  14  million
tonnes  are  accounted  for  by  the  United  Kingdom
alone,  as  a  result  of  new  non(cid:220)coal  fired  plants  being
commissioned,  and  about  2,9  million  tonnes,  2,1
million  tonnes  and  0,7  million  tonnes  in  Denmark,
France  and  Portugal  respectively.  In  most  other
Member  States  there  is  a  stability  or  slight  decrease
in  deliveries.

7.(cid:217)Deliveries  to  industry  as  a  whole  may  have  increased
by  0,4  million  tonnes  (1,4(cid:216)%)  to  29,5  million  tonnes
during  1997,  due  to  the  significant 
in
deliveries  of  hard  coal  to  the  iron  and  steel  industry,
which  more 
in
deliveries 
industries.  The  current
to 
indicate  an  overall
forecasts  for  1998,  however, 
reduction  of  some  1  million  tonnes  to  28,5  million
tonnes,  despite  the  continued  growth  in  deliveries  to
the  iron  and  steel  industry.

than  outweighed 
the  other 

the  decrease 

increase 

8.(cid:217)Crude  steel  production  for  1997  is  likely  to  reach
some  158,0  million  tonnes,  which  would  respresent
an  increase  of  about  7,3(cid:216)%  (+(cid:216)10,8  million  tonnes)
compared  to  1996.  For  1998,  crude  steel  production
could  increase  by  a  further  5  million  tonnes  to  reach
163  million  tonnes.

less 

than 

((cid:134)(cid:216)0,9(cid:216)%) 

The  final  figure  for  coke  production  in  1997  may  be
39,9  million  tonnes,  which  would  be  0,4  million
tonnes 
in  1996.  However,
imports  from  third  countries  could  have  increased  by
0,9  million  tonnes  to  7,4  million  tonnes.  Deliveries  to
steelworks  could  be  42,3  million  tonnes  (+(cid:216)1,2(cid:216)%),
whilst  other  deliveries  of  coke  in  the  Community  are
expected  to  be  some  5,6  million  tonnes,  which  would
be  2,1(cid:216)%  up  on  the  previous  year.

C  131/8

EN

Official  Journal  of  the  European  Communities

29.4.98

For  1998  a  decline  can  be  expected  in  production
(down  0,5  million 
in
deliveries  both  to  the  steel 
industry  (down  0,1
million  tonnes  or  (cid:134)(cid:216)0,3(cid:216)%)  and  to  other  Community
consumers  ((cid:134)(cid:216)6,3(cid:216)%).

tonnes  or  (cid:134)(cid:216)1,3(cid:216)%)  and 

9.(cid:217)Lignite  and  peat  resources  (production  and  imports)
in  the  Community  in  1997  are  expected  to  be  12,4
million  tonnes  ((cid:134)(cid:216)4,5(cid:216)%)  lower  than  in  the  previous
year,  at  around  262  million  tonnes.  The  significant
decline  in  lignite  production  in  Germany  appears  to
be  continuing,  with  a  reduction  of  11,7  million
tonnes  to  175,6  million  tonnes,  due  to  the  lower
demand 
((cid:134)(cid:216)6,6  million
the  power  plants 
tonnes),  the  briquetting  plants  ((cid:134)(cid:216)4,5  million  tonnes)
and  "others’  ((cid:134)(cid:216)0,7  million  tonnes).  The  principal
producing  area  affected  by  the  decline  is  Lausitz
((cid:134)(cid:216)8,7  million  tonnes),  while  in  Helmstedt  lignite
production  is  forecast  to  increase  slightly

from 

For  1998,  lignite  and  peat  resources  are  expected  to
decrease  again  by  5,7  million  tonnes  ((cid:134)(cid:216)2,2(cid:216)%),
owing  to  the  anticipated  fall  in  demand  in  Germany,
partly  offset  by  planned 
for  power
generation  in  Greece  (2,3  million  tonnes,  +(cid:216)3,9(cid:216)%).

increases 

10.(cid:217)In  1997,  imports  of  hard  coal  from  third  countries
are  expected  to  have  risen  by  4,3  million  tonnes
(+(cid:216)3(cid:216)%)  in  comparison  with  the  previous  year.  Total
imports  are  estimated  at  145,5  million  tonnes,  with
the  main  increases  expected  in  the  United  Kingdom
(+(cid:216)4,7  million  tonnes),  Germany  (+(cid:216)1,1  million
tonnes)  and  Denmark  (+(cid:216)1,1  million  tonnes),  partly
offset  by  the  decreases 
in  Spain  ((cid:134)(cid:216)2,9  million
tonnes),  and  France  ((cid:134)(cid:216)0,9  million  tonnes).  With
respect  to  the  suppliers,  changes 
imports  are
principally  expected  to  benefit  Colombia  (+(cid:216)5,1
million  tonnes)  and,  to  a  lesser  extent,  Australia
(+(cid:216)1,3  million  tonnes),  whilst  South  Africa  may  see
a  reduction  of  0,7  million  tonnes  in  tonnages  into
the  Community.

in 

in 

increase 

important 

imports  foreseen 

In  1998,  imports  of  hard  coal  from  third  countries
could  decrease  by  2,8  million  tonnes  ((cid:134)(cid:216)1,9(cid:216)%),
compared  to  1997,  to  reach  142,7  million  tonnes.
The 
into
Spain  (+(cid:216)2,6  million  tonnes)  and  Germany  (+(cid:216)1,8
million  tonnes)  are  more  than  outweighed  by  the
decreases  anticipated  in  most  other  Member  States,
especially  Denmark  ((cid:134)(cid:216)3  million  tonnes),  the  United
Kingdom 
((cid:134)(cid:216)1
million  tonnes)  and  France  ((cid:134)(cid:216)0,5  million  tonnes).
to  be
By  suppliers,  changes  are  not  excpected 
significant  except  for  the  fall  of  imports  from  the
United  States  and  South  Africa  ((cid:134)(cid:216)1,8  million  tonnes
and  (cid:134)(cid:216)1,3  million  tonnes  respectively).

tonnes),  Portugal 

((cid:134)(cid:216)1,5  million 

this 

reduction,  but 

11.(cid:217)After  a  robust  end  to  1996,  traded  coal  prices  have
been  falling  in  1997.  Some  buyers  are  waiting  for  a
further 
is  not  universally
expected.  After  the  very  low  rates  of  last  autumn,
freight  rates  were  higher  during  the  early  part  of
1997  and,  after  their  customary  weakness  in  the
summer,  appear  to  have  been  stronger  during  the
autumn.  However,  particularly 
the  Panamax
market,  some  cheap  deals  have  been  available.

in 

Competitor  fuels  have,  in  general,  maintained  their
price  levels.  The  crude  oil  price  has  been  sustained  at
the  higher  levels  of  recent  years,  and  the  HFO  price
has  already  mirrored  this.  However,  petcoke  has
been  competing  in  the  European  market  this  year;
prices  have  been  lower  than  in  1996,  when  the  US
market  was  short  of  supplies.

With  respect  to  the  prices  for  imported  coal,  the
price  for  coking  coal  in  the  third  quarter  of  1997  is
USD  57,54  per  tonne  of  coal  equivalent  (tce)  as
against  USD  57,44  per  tce  for  the  same  quarter  of
the  previous  year.

The  weighted  average  price  of  steam  coal  consumed
in  power  stations  by  utilities  (contracts  above  and
below  one  year,  and  all  origins)  imported  into  the
Community  in  the  first  quarter  of  1997  (the  latest
information  available  at  the  time  of  writing)  was
USD  47,69  per  tce  compared  with  USD  50,31  per
tce  for  the  same  period  in  the  previous  year.

Average  price  for  coal  imported  from  third  countries

Period

1/1995
2/1995
3/1995
4/1995
1/1996
2/1996
3/1996
4/1996
1/1997
2/1997
3/1997

Coking  coal
(USD/tce)(cid:216)(*)

Steam  coal
(USD/tce)(cid:216)(**)

54,84
57,83
58,73
58,23
57,24
57,34
57,44
57,34
57,28
57,14
57,54

47,97
51,04
50,91
51,84
50,31
48,27
47,77
48,22
47,69

(*) Referred  to  a  standard  coal  quality  of:  ash  7,5(cid:216)%,  moisture

8,0(cid:216)%,  sulphur  0,8(cid:216)%  and  volatile  matter  26(cid:216)%.

(**)(cid:217)For  electricity  generation  purposes.

12.(cid:217)Despite  expansion  in  the  Community’s  GDP  during
1997  there  is  likely  to  be  a  slight  reduction  in  total
being  hit
energy  demand,  with 
particularly  hard.  The  first  forecasts  for  solid  fuels
for  1998  would 
indicate  a  continuation  of  the
downwards  trend  displayed  since  1991.

solid 

fuels