Stowarzyszenie Emitentów Giełdowych Akcja Inwestor Akcjonariat Obywatelski

GPW

10na10

 

you are here: Main page » About us » Market

Market

Coal Market in Poland

Coal is the primary fuel used for power generation in Poland. As evidenced by PSE’s data, total electricity output was 158,767 GWh in 2019, of which 78,190 GWh (49%) were produced by hard coal-fired power plants and 41,502 GWh (26%) by lignite power plants. The remaining 39,075 GWh (25%) were contributed by commercial power plants, wind farms, gas fired power plants and hydropower plants.
 

The structure of fuels used in electrical energy production in Poland in 2019 [GWh]

 Struktura_paliw_EN.jpg

Source: PSE SA, www.pse.pl

 

 

In 2019 domestic power plants generated 3.9% less electricity versus the same period in 2018. The highest increase in electricity output (26.2%) was achieved by gas-fired power plants and wind power plants (19.1%). Production for hard coal power plants decreased, by about 5.1%. The deepest decline, by 15.4%, was suffered by lignite power plants.

 

 

Year-over-year change in fuel consumption for electricity generation in Poland in 2019

Dynamika_2019.jpg

Source: PSE SA, www.pse.pl

 

The dynamics of energy production in 2019 reached a negative result (-3.9%), the demand for energy from hard coal decreased by approximately (5.1%).


Average price of BASE contracts on TGE S.A. 2017 - 2019 [PLN/MWh]

TGE_2019.jpg

Source: TGE SA

 

In 2019 the foreign trade balance was dominated by imports of electricity, totalling 10.6 TWh. Higher imports lead to a lower domestic production of electricity.

 

Production and Sale of Thermal Coal in Poland

 

Poland is a major producer of hard coal globally and the largest one in the European Union. However, a steep fall has been observed for several years. The declining trend of thermal coal production in Poland was triggered by the restructuring of the hard coal sector in 1998-2006. The objectives of that programme were to reduce the capacity of mines, to restructure their debts and to reduce the employment level in mining companies. The programme led to a decline in production and, over a longer time horizon, also in the demand for thermal coal, as a result of partial switch of the economy to other energy sources.
We have been observing the declining trend of coal sales since 2015. Also since 2015 the sales of thermal coal in Poland have exceeded its production. This was reflected in the increase of coal prices on the market.
In 2019, the production of thermal coal amounted to about 49.6 million tonnes, which represents a decline of 3.3% y/y.
Sales in 2019 amounted to about 46.7 million tonnes, including about 31.2 million tonnes of thermal fine coal sold to commercial power plants. Sales of thermal coal decreased by about 7.3% in comparison to 2018.
As at the end of 2019, coal inventories were 4.6 million tonnes, which represents an increase in comparison to the level recorded in December 2018 – 2.0 million tonnes. Higher inventories result from lower hard coal consumption in power plants due to the warm winter and higher wind energy production.


Production, sales and inventories of thermal coal 2017-2019 [million tonnes]

Produkcja_sprzeda___zapasy_EN.jpg

Source: ARP SA

 

Thermal Coal Prices


In 2019, the average annual price of fine thermal coal for commercial power plants was PLN 11.49 per GJ, the change dynamics was ca. 9.7% y/y
In Q4 2019, the average price of fine thermal coal for commercial power plants was PLN 11.69 per GJ, comparing to Q4 2018 the price increased by 9.7%.
In October 2014 the Katowice Branch of the Industry Development Agency (Agencja Rozwoju Przemysłu) created Polish Steam Coal Market Index 1 (PSCMI 1). This index combines a group of model price rates for thermal coal produced by domestic producers and sold in Poland’s power generation market (PSCMI 1).It reflects the level of ex-mine prices of 20-23 MJ thermal coal dusts offered to commercial and industrial power plants. The index is calculated as the weighted average of monthly supplies which meet the qualitative criterion of the index, i.e. total sulphur content below 1%. The price of a monthly product is determined as weighted average price from transactions executed in Poland’s thermal coal market, invoiced in a given calendar month. Source data used for rate calculations include data provided by domestic producers of hard coal to the Katowice Branch of ARP S.A. in the course of the Public Statistics Programme “Hard and Lignite Coal Mining,” which is administered by the minister in charge of economy.
In 2019, the average price based on the PSCMI index was approx. PLN 11.99 per GJ, which compared to the average price in 2018 (PLN 10.95 per GJ) represents an increase by approx. 9.5%.

 

Average thermal coal price in Poland and PSCMI in 2017-2019 [PLN/GJ]

Ceny_EN.jpg

Source: ARP SA



Thermal Coal Imports and Exports


Imports of coal are the main source of that fuel for EU Member States. By 2008 Poland was one of the largest coal exporters to Europe. However, since 2008, it has become a net importer, as a result of changes taking place in the coal market. The key reason was the restructuring of Poland’s coal mining sector, which resulted in a significant reduction of coal production, while internal demand remained stable. Coal is imported to Poland mainly from Russia (65% of total coal imports). Coal is mostly delivered by rail via terminals in Braniewo, Terespol, and Małaszewicze. In 2019 the largest importer of Polish coal were the Czech Republic, receiving nearly 57% of Polish coal exports.


Hard coal imports and exports in 2017-2019 [million tonnes]

Import_eksport_EN.jpg

Source: ARP SA