Coal news and updates

Polish hard coal output down 8% in Q1: ministry

Poland's hard coal mining sector produced 16.465 million mt in the first quarter, down 8.1% year on year, while sales volumes dropped 3% to 16.233 million mt, the Ministry of Economy said Thursday.

Production at Europe's largest hard coal miner, state-owned Kompania Weglowa (KW), fell 17% in January-March to 6.99 million mt while output from privately-owned miner Bogdanka dropped 11.5% to 1.98 million mt, the ministry wrote in a response to a parliamentary question.

Output from state-owned Katowicki Holding Weglowy (KHW) increased 3.6% to 2.845 million mt, while production from state-controlled coking coal miner Jastrzebska Spolka Weglowa (JSW) rose 13% in the quarter to 3.602 million mt.

KW's coal sales fell 1.117 million mt year on year in January-March, while Bogdanka's dropped by 362,600 mt, the ministry said.

JSW increased its sales by 751,700 mt and KHW's sales volumes rose by 133,000 mt.

KHW produces more heating coal than KW or Bogdanka, which mainly supply thermal coal to power generators. The heating coal sector is still growing in Poland. JSW is also in a better position because it has more options to place its main product, coking coal.

The three state companies have been badly affected by falling coal prices and rising production costs, especially KW which is undergoing deep restructuring. Bogdanka has managed its costs better in the difficult environment but it has reduced its output because of the large oversupply of coal on the Polish market.

The ministry said 8.15 million mt of coal was stockpiled at the end of March, similar to the level at the end of 2014.

In January-March the sector recorded losses of Zloty 578.2 million ($161.3 million) on coal sales due to the fact that the market price was below the level of production costs. The sector made a loss of Zloty 35.62/mt on coal sold and an overall net loss in the first quarter of Zloty 657.5 million ($183.5 million).

The achieved average price in the first quarter was Zloty 278.14/mt, down from 2014's average of Zloty 278.74/mt.

source: http://www.platts.com