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EURACOAL Market Report 1/2018

April 2018

WORLD COAL MARKET DEVELOPMENTS1

Global hard coal production has remained relatively stable over recent years; it increased 2.8% to 7.0 billion tonnes in 2017, driven by world economic recovery and higher coal prices. The largest absolute coal production increases were noted in China (+2.0% to 3.52 billion tonnes) and the United States (+6.4% to 702 Mt).

Global seaborne hard coal trade is estimated at 1 141 Mt in 2017, little changed from 2016. The market is dominated by Australia and Indonesia, which together supply two thirds of seaborne coal.

World steel production increased in 2017 to 1 691 Mt, 5.3% higher than in 2016 and contributing to higher coking coal prices.

The outlook for coal in the long term remains stable. While some nations have committed to phase out coal, at least for electricity generation without CCS, others will expand their coal use. The Powering Past Coal Alliance, announced in November 2017, includes a number of European countries (Austria, Belgium, Denmark, Finland, France, Ireland, Italy, Latvia, Liechtenstein, Luxembourg, the Netherlands, Portugal, Sweden, Switzerland and the United Kingdom). Together, the alliance countries account for just 2% of global coal use. Elsewhere, coal expansion is continuing, mainly in South and South-East Asia. According to the IEA World Energy Outlook 2017, India is set to become the second largest coal producer, overtaking the United States and Australia. The fast-growing economies of South-East Asia are increasingly looking to coal to meet their expanding energy needs: Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Global Coal Trade

Australia’s coal exports fell to 372 Mt (-4.8%) in 2017, of which 172 Mt were coking coal and 200 Mt steam coal. Cyclone Debbie hit the country in March 2017 leading to problems at South32’s Appin mine. According to the Australian government, coking coal exports will increase to 193 Mt in the coming years.

1 International coal market data are from VDKI, IHS Markit and government sources.

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Indonesia’s coal exports of all types reached 318 Mt in 2017 and are forecast to grow by 7% in 2018, pushed by higher coal prices. However, coal exporters are disturbed by a government ruling mandating the use of domestic vessels for coal exports from April 2018; the number of Indonesian cargo vessels is insufficient to transport the coal export tonnage.

Russia’s coal exports increased 10% to a record 162 Mt, on the back of Chinese and South Korean demand. SUEK (Siberian Coal Energy Company), the largest Russian coal producer, announced that it would expand its train fleet by more than a third to cover the strong Asian demand. A planned expansion of the Taman coal terminal on the Black Sea will increase its capacity from 20 Mtpa to 35 Mtpa.

South African coal exports rebounded, thanks to improved rail logistics, reaching 83 Mt (+10.2%). Colombia exported 83 Mt of coal in 2017 (-6.1%). A new Pacific coal terminal, scheduled to start operations in 2018, will increase Colombia’s coal export capacity.

On the demand side, coal imports are growing in East and South-East Asia. The five major Asian coal importers (China, India, Japan, South Korea and Taiwan) had stable or increasing coal imports in 2017. China increased imports by 6.1% to 271 Mt in 2017, the highest level for three years, despite restrictions on imports. India’s coal imports declined in 2017 compared with 2016, on the back of higher domestic production. Japan imported 192 Mt in 2017 (+1.4%); its steam coal imports hit a historical record of 115 Mt, largely due to ongoing nuclear power plant outages. South Korea also saw historically high coal imports, at 147 Mt or 9.4% higher than in 2016, following the commissioning of five new coal-fired power plants. Finally, Taiwan increased its coal imports to 68.6 Mt, 5.5% higher than 2016.

The European Union imported 172.5 Mt of coal in 2017, a 3.3% increase on 2016, with strong growth in Spain, France and Portugal compensating for falls in Germany and the UK.

Sources: EURACOAL Market Reports; VDKI; IHS Markit

Coal Prices

Steam coal prices maintained their spectacular recovery of late 2016 and, after a short decline in spring 2017, they recovered to the same high levels of 2016: 110 $/t cif at ports in northwest Europe in November. The fundamentals for this price increase were strong economic growth in coal-consuming countries and higher freight rates due to higher oil prices.

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Global seaborne hard coal trade and hard coal production

Traded steam coal Traded coking coal Total hard coal production

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The current coal price is above the price corridor favoured by the Chinese government, estimated to be 75 to 100 $/tonne on a 6 000 kcal/kg basis.

Coking coal, prices recovered towards the end of 2017 after a summer of decline, reaching over 230 $/t fob in December for Australian prime hard coking, due to production cuts following cyclone Debbie and higher demand as world crude steel output rose 5.3%.

The US dollar remained stable compared with the Russian rouble and the Australian dollar. The euro, however, appreciated significantly over the US dollar in 2017 as the ECB slowed its programme of quantitative easing. The impact of this can be observed in the divergence of steam coal prices in USD/tce and EUR/tce in 2017.

Source: VDKI; IHS Markit first quotation of the month, basis 6 000 kcal/kg (converted to 7 000 kcal/kg)

Sources: ECB; US Bureau of Labour Statistics; Trading Economics

Sources for currencies: ECB; OECD

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MCIS Steam Coal Marker Price cif-NW Europe

Steam Coal (USD/tce) 2016 Steam Coal (USD/tce) 2017

Steam Coal (EUR/tce) 2016 Steam Coal (EUR/tce) 2017

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Inflation (CPI) in 2017

EUR USD

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Freight Rates

Freight rates continued their upward trend in 2017, pushed by stronger oil prices. The rates for cape-sized vessels in USD/tonne from the main export ports to Rotterdam, almost doubled compared with 2016.

Source: VDKI; Frachtcontor Junge & Co

EUROPEAN COAL MARKET2

2017 2016

Mt Mt

Domestic hard coal production 80.7 87.2

Hard coal imports 172.5 167.0

Lignite production 382.6 371.3

The European coal market recovered in 2017, for both lignite producers and hard coal importers, helped by an excellent start to the year. The positive numbers were due to a low output from renewables, confirming coal’s role in balancing the electricity grid: lignite production rose from 371.3 Mt to 382.6 Mt (+3.0%), while coal imports from 167.0 Mt to 172.5 Mt (+3.3%). At the same time, domestic hard coal production fell from 87.2 Mt to 80.7 Mt (-7.5%) as mines closed in Germany and Poland.

The five largest coal importing countries in the EU had mixed results in 2017. Coal imports to Germany declined to 47.9 Mt, 9.8% lower than 2016. Spain’s coal imports surged to 19.2 Mt (+30.6%) to become the second largest coal importer in Europe, following low renewables output in 2017. Italy’s coal imports declined to 15.3 Mt, 14.5% lower than 2016. France increased its coal imports to 15.7 Mt in 2017, 16.3% higher than in 2016. Finally, the Netherlands increased its imports to 16.2 Mt in 2017 (+11.7%).

Elsewhere in the EU, there were two notable developments concerning imports: Polish coal imports jumped to 13.4 Mt in 2017 (+61.4% compared with 2016) on the back of reduced

2 All European coal production and trade data come from EURACOAL members or government sources.

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Newcastle/Rotterdam 2017 Bolivar/Rotterdam 2016 Bolivar/Rotterdam 2017

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domestic production; while Croatia’s coal imports collapsed in the second half of 2017, to give a 0.6 Mt annual total (-50%), as work started on upgrading Plomin 2 with SCR.

On the regulatory side, a new EU regulation on the internal electricity market is being debated amongst several other legislative changes to the European energy system. The main point of discussion for the coal industry is a proposed environmental performance standard that would eventually exclude coal from capacity mechanisms.

* Hard coal exports from Poland and the Czech Republic are excluded to avoid double counting

HARD COAL

Producing country 2017 2016

Mt Mt

Czech Republic 5.5 6.8

Germany 3.9 4.1

Poland 65.5 70.4

Spain 2.8 1.7

United Kingdom 3.0 4.2

Total 80.7 87.2

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EUROPEAN COAL MARKET

Domestic hard coal production Hard coal imports* Lignite production

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EU HARD COAL PRODUCTION

Germany United Kingdom Czech Republic Spain Poland

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Czech Republic

Hard coal production in the Czech Republic amounted to 5.5 Mt in 2017, a decrease of 19.1% from 2016. Approximately 2.3 Mt of hard coal were exported (-33%) and approximately 3.6 Mt were imported (+15%). Imports of coking coal rose to 1.9 Mt (+22%), following the decline in domestic hard coal production.

In corporate news, OKD, the only producer of hard coal in the Czech Republic, recovered in 2017 after declaring insolvency in 2016 and will continue production beyond 2020.

Denmark

In Denmark, coal imports slightly increased again to 3.1 Mt (+6.9%) in 2017, from 2.9 Mt in 2016. Coal imports had been forecast to be lower, but a spell of stormy and cold weather doubled the normal monthly coal imports in December 2017.

Finland

Finland does not have any coal mining operations but uses solid fuels for electricity generation. In 2017, preliminary data shows that imports stood at 3.9 Mt, 1.5 Mt being coking coal; figures that are almost identical with 2016. Overall, the consumption of hard coal decreased by 10% in 2017 in comparison with 2016, to 3.2 Mt. Coal power plants supplied 22.7 TWh of the 65.0 TWh of total electricity production in 2017, a share of 35%.

Germany

In Germany, hard coal production decreased to 3.9 Mt in 2017 from 4.1 Mt in 2016 (-4.9%). In 2018, all hard coal mining in Germany will cease. Coal imports declined to 47.9 Mt (-9.8%), significantly lower than in 2016. Total coal and coal products imports were 50.3 Mt (35.1 Mt steam coal, including anthracite, 12.8 Mt coking coal and 2.3 Mt coke).

Employment in the hard coal mining sector decreased by 20%, to 5 950 in 2017, from 7 480 in 2016.

Hard coal’s share in gross electricity production decreased significantly by 32.4% in 2017 to 75.9 TWh, covering 11.6% of the German electricity market. This lower share pushed many companies to declare the closures of hard coal-fired units in the coming years, if allowed by the system operators. In contrast, the new hard coal-fired 1 055 MW Datteln 4 power plant is scheduled to start operation by the end of 2018.

Germany’s EON sold its remaining stake in Uniper to Finland’s Fortum, despite Uniper’s resistance. However, Fortum is still short of a majority stake. Uniper’s portfolio includes 8.1 GW of coal-fired assets in Europe and 2.3 GW in Russia.

Meanwhile, RWE has reorganised its units: nuclear and lignite activities have been regrouped under RWE Power, while its gas, hard coal, hydroelectric power and biomass generation business were reorganised under RWE Generation. Further changes are expected with an announced asset swap with EON.

Ireland

Ireland saw coal imports decrease to 1.4 Mt in 2017, 22% lower than in 2016. The 855 MW Moneypoint plant, the only coal-fired power station in the country, may be converted to biomass before 2025 following a government announcement to phase out coal.

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Italy

In Italy, coal imports stood at 15.3 Mt in 2017, a 14.5% drop compared with 2016. Crude steel production grew to 24 Mt and is the second highest in the EU after Germany.

The Italian energy policy for 2030 aims to narrow the gap between Italy’s high electricity prices and the EU average. This mission is made more difficult by the decision to phase out all coal-fired power plants by 2025.

The Netherlands

In the Netherlands, the Port of Rotterdam snubbed pressure from Rotterdam city council to reduce coal handling at the port, saying that the market would ultimately decide the outcome. The port granted a 25-year lease extension to one of the largest transhipment companies, EMO, which handles around 20 Mtpa. Coal imports to the Netherlands for domestic use increased to 16.2 Mt in 2017, 11.7% higher than in 2016. However, the new governmental coalition agreement jeopardises the future of the country’s coal-fired power plants.

Poland

Hard coal production in Poland decreased in 2017 to 65.5 Mt (-7.0% compared with 2016). Polish hard coal exports decreased to 6.3 Mt in 2017 (-30.4%). Imports of hard coal into Poland however increased sharply to 13.4 Mt in 2017 (+61.4%).

As previously reported (Coal Market Report 2017-2), new coal mine projects are being developed in Poland: the Nowa Ruda mine in southwest Poland and the Sawin mine near Lublin. Prairie Mining is also developing the Debiensko and Jan Karski mines, both metallurgical coal. Exploratory drilling results, published in February 2018, confirm the quality of the Jan Karski deposit as high value, ultra-low ash, semi-soft coking coal – known in Poland as Type 34 coal.

On the power side, the bidding process for the new coal-fired 1.0 GW Ostroleka C plant, planned to start operation in 2023, was concluded in December 2017 with three bidders: the China Power Engineering Consulting Group; a consortium of GE Power and Alstom Power Systems; and a local grouping of Polimex-Mostostal and power-equipment company Rafako.

In a February 2018 decision, the European Commission approved PLN 5 billion (approximately €1.25 billion) support for coal mine closures. Furthermore, the Commission has approved capacity mechanisms in Poland and five other EU member states (Belgium, France, Germany, Greece and Italy). These will allow payments to power plants based on their availability.

Spain

In Spain, coal production in 2017 increased by 64.7%, to 2.8 Mt. Figures for coal imports show an increase to 19.2 Mt (30.6%), the highest for three years. Coal-fired power plants generated 45.2 TWh in 2017, covering 17.2% of the Spanish electricity market.

The Spanish government has shown strong support for coal, further reinforced by a March 2018 appeal by CARBUNIÓN, the Federation of Spanish Coal Producers, and the main Spanish unions, UGT and CCOO, to support domestic coal power plants until 2050.

On the power market, the Spanish utility Iberdrola announced its intention to close its two remaining coal-fired power plants, Lada and Velilla which have a combined capacity of 874 MW. Negotiations with the energy minister are in progress regarding the coal plant

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closures. Other major energy companies are waiting for the Energy Transition and Climate Change Law to be finalised before taking any decisions regarding their coal assets.

Meanwhile, in November 2017, the European Commission opened an investigation into Spain's support for coal power plants. More importantly, the Spanish government is currently analysing the report for an energy transition to 2030, approved in March 2018 by a group of government appointed experts (Comisión de Expertos de Transición Energética).

Turkey

In Turkey, hard coal production declined to 1.2 Mt in 2017 compared with 1.3 Mt in 2016 (-7.7%). However, hard coal deliveries to power plants increased to 18.8 Mt, compared with 16.9 Mt in 2016 (+11.2%), supported by increased imports. Coal imports stood at 36.6 Mt, 4.9% higher than in 2016.

Cenal Elektrik’s new 1 320 MW coal-fired power plant started operation at Karabiga, Canakkale, fuelled by around 3.2 Mtpa of imported thermal coal.

Ukraine

Coal production in Ukraine decreased to 34.9 Mt, -14.7% compared with 2016, this being slightly less than the planned production of 35.3 Mt for 2017. Many Ukrainian power plants are currently converting from anthracite to G-grade coal, following the loss of mines in non-governmental controlled territories.

The Ukrainian government announced through its Energy and Coal Ministry that it will consolidate all of its state-owned coal mining assets into a new company.

United Kingdom

In the United Kingdom, coal accounted for just 6.5% of generation in 2017, compared with 38.2% as recently as 2012 and 9.8% in 2016. Coal production was 3.0 Mt in 2017 (-28.6%) while imports remained stable at 8.5 Mt.

The end date for ‘unabated’ coal generation is set as 1 October 2025. No earlier interventions are planned, other than the carbon tax already in place. Implementation will be via an emission performance standard of 450 gCO2/kWh, on an instantaneous rather than average basis.

While coal use for electricity generation has a clear end date, coal production will continue beyond 2025, with some mines in the UK having long-term prospects by focusing on alternative markets. West Cumbria Mining submitted a planning application for a new underground metallurgical coal mine; a decision is expected in spring 2018.

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LIGNITE

Producing country 2017 2016

Mt Mt

Bulgaria 34.4 31.2

Czech Republic 39.3 38.5

Germany 171.3 171.5

Greece 37.7 32.6

Hungary 8.0 9.2

Poland 61.0 60.2

Romania 25.7 23.0

Slovak Republic 1.8 1.8

Slovenia 3.4 3.3

Total 382.6 371.3

Bulgaria

In Bulgaria, coal use and production increased in 2017, mainly due to higher electricity consumption. From 13 January to 9 February 2017, the Bulgarian Ministry of Energy banned the export of electricity due to extremely low temperatures. Lignite production increased to 34.4 Mt (10.3% higher than 2016), while lignite consumption stood at 34.4 Mt (+15.1%) in 2017.

Lignite-fired electricity provided 20.6 TWh or 45.3% of Bulgaria’s electricity supply in 2017, an 8.5% increase on 2016.

In October 2017, the Czech utility company ČEZ announced that it had agreed on the sale of its Bulgarian hard coal-fired 1 265 MW Varna thermal power plant, temporarily shut down since 2015, to Bulgarian company SIGDA OOD.

Czech Republic

Brown coal production in the Czech Republic increased by 2.1% to 39.3 Mt in 2017, most being used for electricity production (31.3 Mt).

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Poland Greece Czech Republic Romania Bulgaria

Hungary Slovenia Slovak Republic Germany

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Production came from four companies: SD (21.7 Mt), VUAS (7.5 Mt), SU (6.9 Mt) and Sev.en (3.2 Mt). Since the beginning of 2018, VUAS and Sev.en have been merged into a new energy group, Severní energetická Group (Sev.en Group).

In 2017, the electricity mix was dominated by brown coal (42.5%) and nuclear (32.5%), followed at a distance by hard coal (5.2%) and gas (3.9%). The new 660 MW brown coal fired power station in Ledvice started a two-year trial operation in November 2017, with commercial operation being expected to continue until 2050.

Germany

In Germany, lignite production in 2017 was 171.3 Mt, 0.1% lower than 2016. The power plant in the Helmstedt area entered the strategic reserve, hence mining operations were stopped, lowering total annual lignite output. However, these mining operations were small, at only at 1.1 Mtpa.

About 90% of lignite production was used in power plants to generate electricity and heat. Power generation from lignite was 1.0% lower in 2017, at 148 TWh. The number of workers in the German lignite industry at the end of 2017 was around 20 900.

In gross electricity generation, brown coal had a 22.5% share of the market, while hard coal had an 11.7% share. RES had a 33.3% share, nuclear 14.1%, gas 13.2%, oil 0.9% and the remaining 4.3% came from other electricity sources, mainly hydro. There is a large discrepancy between the installed capacity and electricity generation output of these different sources.

On the political side, after months of negotiations since the September 2017 general election, a final agreement was reached between Chancellor Merkel’s conservatives (CDU/CSU) and the social democrats (SPD). The German coalition agreement establishes a special commission on “Growth, Structural Change and Employment”, bringing together policymakers, industrialists, NGOs, trade unions and regional stakeholders to draft an action plan for coal by the end of 2018.

Greece

In Greece, lignite-fired power generation accounts for with about one third of the electricity market. Lignite production increased by 15.6% to 37.7 Mt in 2017, 35.4 Mt from PPC mines and 2.3 Mt from smaller mines, due to a shortage of electricity production from hydro. There is no hard coal mining in Greece and imports stood at 0.4 Mt in 2017, almost at the same level as in 2016. Hard coal consumption is low, used only for industrial purposes.

Lignite-fired electricity production was 16.4 TWh in 2017, 32.2% of the total generation of around 51 TWh. Since 2007, the share of lignite-fired electricity decreased from 54.9%, but remains the most significant supplier in the system. A large increase over the years is noted for renewables power generation, which grew to 10.0 TWh in 2017. Gas-fired power generation has also grown, to 15.3 TWh in 2017.

A 660 MW lignite unit in the Ptolemais area is under construction and scheduled to begin operation in the first months of 2020.

The Hellenic Republic has decided that 40% of PPC’s lignite units and mines shall be divested in order to create a more competitive electricity market, namely the lignite-fired plant of Meliti 1 and the option for a new Meliti 2 plant, as well as Megalopoli 3 and 4 and all the mining assets and resources related to those units.

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Hungary

Coal production in Hungary stood at 8.0 Mt in 2017, 13% lower than in 2016; while coal imports remained at the same level of 1.5 Mt.

RWE Power and EnBW sold for an undisclosed sum in December 2017 their shares of the 950 MW Mátrai Eromu lignite power plant to a consortium of Czech firm Energetický a průmyslový (EPH) and Status Power Invest, owned by Hungarian investor Lőrinc Mészáros. The power plant is supplied by opencast mines at Visonta and Bükkábrány and has around 2 000 employees.

In another transaction also in December 2017, French multinational Veolia acquired the Bakonyi Erőmű Zrt heat and power plant at Ajka in western Hungary. The plant is fuelled with biomass and coal.

Poland

In Poland, lignite production was 61.0 Mt in 2017, 1.3% higher than in 2016. Lignite-fired electricity provided 52.3 TWh of the 169.8 TWh total generation, a 30.8% share.

The 600 MW Adamów power plant, part of the Pątnów-Adamów-Konin group, was shut down at the beginning of January 2018. However, the construction of power units 5 and 6 at PGE’s Opole power plant is 88% completed, according to a company announcement in November 2017. The new 450 MW unit at Turów lignite power plant is also progressing well. Finally, in December 2017, Kozienice power plant was commissioned. The 1 075 MW block achieves an efficiency of 45.6%, which allows a carbon emission reduction of about 25% compared with existing coal-fired blocks.

Finally, in May 2017, Polska Grupa Energetyczna SA (PGE) acquired all EDF Polska assets in a transaction valued at €1.4 billion. The transaction includes the hard coal-fired Rybnik power plant in Upper Silesia.

Romania

In Romania, lignite production increased by 11.7% to 25.7 Mt in 2017, 22.5 Mt being mined by Oltenia Energy Holding, the second largest electricity company in the country.

Total electricity production in 2017 was around 59 TWh, 3% higher than in 2016. This increase was due to higher national consumption and market coupling with Hungary, the Czech Republic and Slovakia – Romania being a net exporter of electricity. Coal-fired electricity generation had a good year in 2017, increasing by 6.1% to 15 TWh, or 25.2% of the power market.

In March 2018, the European Commission opened an investigation into the restructuring support for coal miner and power producer Hunedoara Energy Holding. This investigation will inquire if the proposed restructuring plan could restore the long-term viability of the company without continued state aid.

Slovakia

In Slovakia, lignite production remained stable at 1.8 Mt in 2017, most being consumed for electricity generation. Hornonitrianske bane Prievidza, a.s. (HBP) is the only coal miner in the country, after recent mine acquisitions, employing around 4 200 people. Coal is extracted in underground collieries at Nováky, Handlová and Čáry.

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Slovakia has two coal-fired power plants: Vojany TPP, fuelled by imported coal from Russia and Ukraine, and Nováky TPP, fuelled by domestic coal from HBP. Vojany TPP was little used in 2017. Coal imports stood at 3.8 Mt in 2017 (-5.0% compared with 2016).

The Slovak government announced at the end of 2017 that it will buy majority shareholdings in the gas, electric power and district heating industry to create a state energetic holding company, which will be able to start and finance new energy projects.

Slovenia

In Slovenia, lignite production slightly increased at 3.4 Mt, +3.0% compared with 2016. Premogovnik Velenje is the only coal mining company in the country, its coal being used mainly to generate electricity at Šoštanj Thermal Power Plant (TEŠ). A new, ultra-supercritical, 600 MW unit started commercial operation at the power plant in 2015.

TABLE 1

World Market Price evolution (Coal, Coke, Freight, Crude Oil)

MCIS Steam Coal Marker Price (7000kcal/kg)

Jan Feb March Apr May June July Aug Sept Oct Nov Deccif-NW EuropeSteam Coal 2016 56.19 52.34 53.00 52.61 54.48 59.31 62.94 71.19 71.12 88.52 100.25 100.41(US$/tce) 2017 101.15 97.64 91.16 90.50 85.93 90.25 97.81 97.79 103.06 107.33 110.76 107.25

Steam Coal 2016 51.74 47.18 47.75 46.40 48.17 52.82 56.86 63.49 63.43 80.28 92.83 95.24(EUR/tce) 2017 95.30 91.75 85.33 84.41 77.72 80.38 84.98 82.83 86.50 91.30 94.36 90.61

Source: VDKI, McCloskey: First quotation of the month, basis 6000 kcal/kg (converted to 7000 kcal/kg)

Freight Rates (USD/t)R Bay/Rotterdam 2016 2.64 2.50 2.38 3.79 3.70 3.87 4.03 3.79 5.98 6.40 7.33 6.67(Capesize) 2017 6.86 5.33 7.01 7.18 5.88 5.37 4.68 6.55 8.08 8.65 10.44 11.05

Newcastle/Rotterdam 2016 4.96 4.70 4.28 6.33 7.16 7.01 7.74 7.67 10.48 11.63 12.22 11.28(Capesize) 2017 10.54 8.66 11.09 11.60 9.91 9.02 8.47 11.13 13.63 14.32 16.96 17.28

Bolivar/Rotterdam 2016 3.91 3.54 3.23 5.03 5.80 5.23 5.33 4.77 6.70 7.15 8.66 7.09(Capesize) 2017 7.86 6.18 7.96 8.25 6.65 6.40 5.82 8.12 9.53 9.98 11.5 12.35

Source: VDKI, Frachtcontor Junge & Co

Currency Rates

USD / EUR 2016 0.92 0.90 0.90 0.88 0.88 0.89 0.90 0.89 0.89 0.91 0.93 0.952017 0.94 0.94 0.94 0.93 0.90 0.89 0.87 0.85 0.84 0.85 0.85 0.84

USD / RUB 2016 76.25 77.22 70.47 66.68 65.66 65.31 64.33 64.92 64.60 62.68 64.36 62.192017 59.96 58.39 58.10 56.43 57.17 57.82 59.67 59.65 57.69 57.73 58.92 58.59

AUD / USD 2016 0.70 0.71 0.75 0.77 0.73 0.74 0.75 0.76 0.76 0.76 0.75 0.732017 0.74 0.77 0.76 0.75 0.74 0.76 0.78 0.79 0.80 0.78 0.76 0.76

Source: ECB; OECD

Crude Oil (USD/Barrel)

Crude Oil 2016 26.50 28.72 34.65 37.86 43.21 45.84 42.68 43.10 42.89 47.87 43.22 51.672017 52.40 53.37 50.32 51.37 49.20 45.21 46.93 49.60 53.44 54.90 60.74 62.06

Source: OPEC Basket Prices

TABLE 2

WORLD SEABORNE COAL TRADE - STEAM COAL

Exporting Countries 2017 (1-12) 2016 (1-12) Diff. 2017/16 (1-12)Mt Mt Mt

PACIFIC

Australia 199.9 199.0 0.9Canada 1.5 2.0 -0.5China 5.8 7.4 -1.6Indonesia 318.0 311.0 7.0Russia 78.6 75.0 3.6South Africa 66.9 55.7 11.2USA (excl. Canada) 16.4 4.9 11.5

SUB-TOTAL 687.1 655.0 32.1

ATLANTIC

Canada 0.5 0.2 0.3Colombia 70.2 76.0 -5.8Indonesia 5.5 7.4 -1.9Russia 87.1 74.1 13.0South Africa 16.0 19.6 -3.6USA (excl. Canada) 20.4 11.5 8.9

SUB-TOTAL 199.7 188.8 10.9

Others and non-specified 5.6 8.1 -2.5

TOTAL 892.4 851.9 40.5

incl. Anthraciteprovisional data with italicsSource: IHS Markit provisional data and own calculations

TABLE 3

WORLD SEABORNE COAL TRADE - COKING COALExporting Countries 2017 (1-12) 2016 (1-12) Diff. 2017/16 (1-12)

Mt Mt Mt

Australia 172.0 189.4 -17.4Canada 28.4 28.0 0.4China 2.3 1.2 1.1Russia 22.8 21.7 1.1USA (excl. Canada) 46.4 33.7 12.7Others 2.8 17.4 -14.6

TOTAL 274.7 291.4 -16.7Source: IHS Markit, provisional data and own calculations

TABLE 4

EU CRUDE STEEL PRODUCTION

COUNTRY

2017 (1-12)

Mt

2016 (1-12)

Mt

Austria 8.1 7.4

Belgium 7.7 7.7

Bulgaria 0.7 0.5

Croatia 0.0 0.0

Czech Republic 4.6 5.3

Finland 4.0 4.1

France 15.5 14.6

Germany 43.6 42.1

Greece 1.4 1.2

Hungary 1.9 1.3

Italy 24.0 23.3

Luxembourg 2.2 2.3

Netherlands 6.8 6.9

Poland 10.3 8.9

Slovakia 5.0 4.8

Slovenia 0.6 0.6

Spain 14.5 13.7

Sweden 4.7 4.6

United Kingdom 7.5 7.6

Others 5.6 5.3

EU-28 168.7 162.3 29.0

Source: IISI

TABLE 5

EU Hard coal and lignite production and consumption

COUNTRY1-12 2017

Mt

1-12 2016

Mt

1-12 2017

Mt

1-12 2016

Mt

Czech Republic 5.5 6.8 2.5 2.5

Germany 3.9 4.1 n.a. n.a.

Poland 65.5 70.4 n.a. 30.5

Spain 2.8 1.7 20.2 14.7

United Kingdom 3.0 4.2 8.6 12.1

EU-28* 80.7 87.2 n.a. n.a.

Ukraine 34.9 40.9 n.a. n.a.

Turkey** 1.2 1.3 18.8 16.9

Lignite production

COUNTRY1-12 2017

Mt

1-12 2016

Mt

1-12 2017

Mt

1-12 2016

Mt

Bulgaria** 34.4 31.2 34.4 29.9

Czech Republic 39.3 38.5 31.3 29.0

Germany 171.3 171.5 154.0 156.9

Greece 37.7 32.6 38.0 34.2

Hungary 8.0 9.2 n.a. 8.6

Poland 61.0 60.2 60.4 59.6

Romania 25.7 23.0 22.6 22.5

Slovakia 1.8 1.8 1.8 1.8

Slovenia 3.4 3.3 n.a. 3.7

EU-28* 382.6 371.3 n.a. n.a.

Serbia 39.1 38.4 37.7 36.3

Turkey** 70.4 50.9 61.2 43.4

*large producers only

**Bulgaria - Fuel consumption in public TPPs not being surveyed from 2017. Replaced by inland deliveries.

**Turkey - deliveries to thermal power plants (including imports for hard coal)

Provisional figures in italics

Hard coal productionConsumption of hard coal for

power generation

Lignite consumption for

power generation

TABLE 6

EU coal imports

COUNTRY1-12 2017

Mt

1-12 2016

Mt

1-12 2017

Mt

1-12 2016

Mt

1-12 2017

Mt

1-12 2016

MtAustria 1.1 2.4 3.6 3.6

Belgium 1.8 1.8 3.6 3.7

Bulgaria 0.0 0.7 0.9 0.7

Croatia 0.0 1.2 0.6 1.2

Czech Republic 1.9 1.5 1.7 1.6 3.6 3.1

Denmark 0.0 2.9 3.1 2.9

Finland 1.5 2.4 3.9 3.9

France 15.7 13.5

Germany 12.8 12.8 35.1 40.3 47.9 53.1

Greece 0.3 0.0 0.4 0.3

Hungary 1.2 0.2 1.5 1.5

Ireland 0.0 1.8 1.4 1.8

Italy 3.9 14.0 15.3 17.9

Netherlands 3.8 10.7 16.2 14.5

Poland 2.2 6.1 13.4 8.3

Portugal 0.0 5.3 5.9 5.3

Romania 0.0 1.0 0.9 1.0

Slovakia 2.7 1.3 3.8 4.0

Slovenia 0.0 0.0 0.4 0.4 0.4 0.4

Spain 1.8 1.8 17.4 12.9 19.2 14.7

Sweden 2.0 1.0 2.7 3.1

United Kingdom 2.6 2.8 5.8 5.7 8.5 8.5

EU-28 172.5 167.0

Ukraine 10.5 3.3 19.8 14.2

Serbia 0.0 0.2 0.5 0.2

Turkey 5.8 30.4 36.6 34.9

Provisional figures in italicsSource: EURACOAL members, McCloskey, VDKi, national government statistics, Eurostat

Coking coal imports Steam coal imports Total coal imports