UK September coal stocks drop on high consumption
UK coal stocks held by electricity generators dropped 2% month on month in September to 12.1m tonnes, as coal consumption rose, while net coal imports decreased slightly compared with August.
In September, electricity generators consumed 4.1m tonnes of coal, up from 3.5m tonnes in August, data from the Department of Energy and Climate Change (DECC) showed on Thursday.
Falling coal prices and consequent attractive clean dark spreads have made coal UK's main electricity generation source with monthly coal consumption rising an average 44% year on year in 2012. For example, DECC data show that UK electricity generators burned just 2.7m tonnes of coal in September 2011 - 51% less than in the same month of 2012.
Coal accounted for about 43% of the country's total power generation this year so far, compared with a 27% share held by gas, and a 21% share held by nuclear generation, according to data collected by ICIS every working day from British transmission system operator National Grid.
However, despite traders reporting steady physical coal demand in the UK this year, September 2012 coal stocks were 24% lower year on year.
One market participant recently attributed the November uptick in the price of physical coal in the Atlantic Basin to the fact that coal stocks in the UK are relatively low compared with historic averages, while coal burn is likely to remain high throughout this winter because of rising gas prices and unattractive clean spark spreads.
Despite this, September net coal imports were 3% lower month on month at 3.5m tonnes, DECC data show. MV
Other Related Stories