Coal & Carbon - rollercoaster ride continues

The Montel energy podcast – market insights from people in the know. 
Carbon prices have been on a rollercoaster ride for the past year, although not in the same direction. With the EU ETS helping to push coal out of Europe’s energy mix, where is the future demand for coal going to come from?

Listen to the latest episode of the Montel Weekly podcast to hear experts discuss fuel switching, greenwashing and the role of speculative traders. And the host plays catch-up. 

Host:

• Richard Sverrisson, Editor-in-Chief Europe, Montel. 

Guests: 

• Diana Bacila, coal analyst at Alpiq, 
• Trine Braathen, carbon analyst at Kinect Energy Group. 

Transcript

Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:05

Hello listeners and welcome to the Monte Weekly podcast. Today joining me, Richard Sverrisson is Diana Bacila of Alpiq, a coal expert. I'm Trina Broughton from uh, connect, who is a carbon market expert. Thank you very much for joining me. It's a pleasure to have you here. Thank you very much, and thank you for the invitation. I'd like to start off by talking about the, the developments in your respective markets, because it's been quite a topsy-turvy, uh, last six months to a year. So, Diana, if I can start with you and say, if you can highlight the main developments in, in the coal market in the last six months to 12 months, and what are the reason for a certain downturn in prices?

Diana Bacila, coal analyst at Alpiq: 0:43

What we have seen is that the coal price has basically fallen from, um. 80 to $100 perton to 60, uh, at, at current levels in the market we see today. And the main reason for this has been a strengthening of the global coal supply and demand balance due to a mild winter overall in. In Europe as well and in Asia and also, um, let's say some kind of improved of environment for miners to mine more, first of all. And second, we did not have any supply disruptions in the global market. Mm-hmm. So overall, everything has, uh, pointed or left more coal supply available in the system, both on the stock side from consumers and, um, more coal being exported by producers.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 1:25

Mm-hmm. So, I mean, China's quite an important part of this, isn't it? Exactly. Could you, could you explain a little about, about the role China has in, in the, the pricing of European coal?

Diana Bacila, coal analyst at Alpiq: 1:35

The main role that China has is especially related to its coal production domestically. Hmm. What China has been doing in the past two years and a half has been to invest more into its mine. Uh, mines into the coal mines in China, and what we have seen is now that, uh, China has actually, uh. Kind of it owns at the moment, more coal mines, more advanced coal mines. It's only also available or able to produce more coal. So therefore, higher mining, uh, capacity leads to more coal production in China. As a result, the Chinese government also has its own preference, let's call it, for the price they should see in the market. And as a result, each time the price falls out of the ban that the Chinese government wants to have. They play around with imports, meaning they either open the tap or close the tap for coal imports coming from, from especially Australia and Indonesia and other markets. So this is what happened this year. In the beginning of 19, the Chinese government decided to put a stock on coal imports as a result, leaving more coal available into the Pacific market and ending up depressing prices in the area. In Europe. On the other hand, as you can imagine, since less call from the Atlantic that is supposed to feed Europe is now available overall, ends up with improved supply in the basin. And if you combine that with mild weather and lower consumption, you get the API two at $60

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:02

perton, and this could be set to continue.

Diana Bacila, coal analyst at Alpiq: 3:06

I would be cautious in, uh, uh, stating that since now we, we, if we look at the level itself, we have seen this level back in 2015, but you have to consider where oil price sits today compared with wired oil. Price was sitting back in 15, that was 45. Now we see $70 per barrel, which is of course supporting the production costing coal. Hmm. So therefore I would, uh, say that, uh, these levels or, um, in a way are, are very, very close to the production costs, uh, that we see, especially from, uh, miners in the Atlantic, like Russia. And below these levels. Then, uh, it, it implies that the market will have to stop mining. Basically, we, we should see supply destruction everywhere in order to rebalance. The global coal market

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:53

because you had some interesting numbers. Uh, the total market size is about 7 billion tons. China produces domestically three and a half billion and imports 200 to 300 million. Trine moving on to carbon now? Not so, so many global factors involved in driving the prices here, but it's certainly been another topsy-turvy year. And, uh, I think, uh, we're at the, our Fundamental Price Driver conference and you highlighted some, some extreme cases of volatility. Now what are, what have been the main drivers in this rollercoaster year, if you like?

Trine Braathen, carbon analyst at Kinect Energy Group: 4:26

Yeah, it, it's a lot of different factors playing in here for the price development, but I would say the mostly the main factor is actually the sentiment and all the price outlooks, predicting increased prices and keeping all the speculative trading activity. Uh, with the increased volumes and positions in this market really driving the volatility, uh, and really. Increasing the spreads we've seen. Um, so it's definitely one of the biggest factors. But we've seen, uh, of course the UK and the Brexit development the past two months. Uh, we see the market is reacting heavily to news related to this. Mm-hmm. And, um, all the upward movement we see in the past two months is related to the delay of the deadline of the. Uh, European Brexit or the UK Brexit. So of course, and the

Richard Sverrisson, Editor-in-Chief Europe, Montel: 5:30

downturn has been the confirmation of the fears of a no deal Brexit. Yes. Yeah. Yes.

Trine Braathen, carbon analyst at Kinect Energy Group: 5:35

Basically. So this, uh, this political game is playing a huge role in the price development on a daily day basis. Mm-hmm. And also triggering. We see kind of the technical trading activity in this market is heavily influenced by all this activity, basically, and, and, and we see these trading levels being broken on, both on the upside and also on the down downside is triggering further positions. Uh, so it's, it's a very interesting market to follow at the moment.'cause it is a lot of things happening. Mm-hmm. Absolutely. And just, just today it's actually broken. The key. A resistant level at the 26 years per ton, which makes it very interesting to see the development if it's corrects down within the next couple of days, or if we actually go into new trend line.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:33

It'll be very dependent on news about Brexit, I suppose. Yeah. Yes, of course. But, so it's quite interesting here. You're both analysts, but you're saying also that analysts, uh, have driven, been part, have, have partly driven this market upwards. I think there was some, some, some crazy numbers out there. A hundred, uh, euros a ton and 65, 45. So, so that, that's quite interesting. You also mentioned here earlier, Trina, that the number. That speculators were trading in, in the markets 160 million tons you mentioned. Yeah. Uh, could you, could you explain that number a bit more? What kind of percentage of the total or what does it represent on a daily level?

Trine Braathen, carbon analyst at Kinect Energy Group: 7:07

Yeah. We see this, uh, this is of course a difficult number to estimate. Mm-hmm. It's, uh, it's very difficult to know the exact. The number. Mm. Uh, 'cause we do have a lot of banks coming in, which are not the traditional compliance, um, market players. Mm. And we do have the own like traders, basically trading firms and so forth coming into this market. And also the pensions and hedging funds with a much longer term view on the market, um, with a lot more. Long-term investments. Mm. Uh, compared to the day-to-day trading activity. Mm. Um, so, sure. Yeah. It's, um, it's interesting to see,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 7:54

is it, is it something you can see in the coal market, Diana, the role of the, the, you know, the, the speculative, uh, players or the financial players? Is it hard to, 'cause I know there's a lot of banks trading coal and Not anymore. Not anymore. Okay. They've moved out as well. Okay.

Diana Bacila, coal analyst at Alpiq: 8:07

It's basically, that happened many years ago. Basically, that's why we have, I'm out of date.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 8:12

Shame on me, but I give they certainly, but they certainly provide a lot of, uh, uh, analysis. Uh, Diana didn't. They? They

Diana Bacila, coal analyst at Alpiq: 8:19

did, but that's why they're not doing it anymore, anymore. So,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 8:22

yeah. Again, again, I need to, I need to catch up here. I need to speak to my colleague Lawrence Walker, and he'll, he'll keep me up to date, Tim.

Diana Bacila, coal analyst at Alpiq: 8:29

Basically, in the, in the core market, what we do have are the, the players that are actually interested too. Do some real business as well. Mm-hmm. And we have not many of them left. That's why based the liquidity is very, very low. Mm-hmm. And, um, some trades can actually induce pretty big price changes on a day-to-day basis. Okay. Depending on the presence of those players. Utilities, big producers that we know of, uh, in Europe. So they, uh, they are the ones active in the market. Less bank banks are, are, have disappeared. Uh.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 9:04

But there are some big fi, I dunno if you call them, trading houses such as the ones who congregate, you know, some Singapore based or Geneva based, or London based.

Diana Bacila, coal analyst at Alpiq: 9:14

They are the ones actually still involved. But, uh, their focus of course is, uh, it's also, um. Spread, let's say, to towards different commodities? I would say not just coal, so I would stick to the, the big producers and the utilities. Mainly the most active in coal, but liquidity is pretty, pretty low.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 9:36

Pretty low, yeah. Yeah. Most

Diana Bacila, coal analyst at Alpiq: 9:37

of that you have on the front year contract, and the less, the others are less liquid.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 9:44

How about transparency?'cause that's been kind of, it's been, the coal market's been criticized for being quite opaque in the past. How, how does that, uh, how has that now?

Diana Bacila, coal analyst at Alpiq: 9:52

It has, uh, not changed. Mm-hmm. Uh, which of course for a coal analyst, uh, it's, uh, still a pretty difficult, uh, task to be able to understand what's actually going on, going on, on the ground, since you don't really see many things. And, um,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:08

but that's why people are very dependent on your analysis then, don't they?

Diana Bacila, coal analyst at Alpiq: 10:10

Exactly.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:11

Mm-hmm. We talked a little bit about, um, uh, you both mentioned the downturn in demand for coal in, in, in Europe. Would you say, Donna, that it's driven by the et. S.

Diana Bacila, coal analyst at Alpiq: 10:23

That's part of it.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:25

Mm-hmm.

Diana Bacila, coal analyst at Alpiq: 10:25

Especially since, um, theoretically, yes, the, the, the coal price would be, uh, negatively impacted if, uh, we have a higher CO2 price, that's the direct impact. But I would say the, the main thing that has been, let's say, killing coal consumption in Europe has, first of all. Weather, renewable output. And, um, despite the fact that, for example, this year we have even seen lower hydropower generation, which would've implied we should see more thermal power with coal and gas. It apparently, uh, gas has, uh, kind of, uh, gained a little bit more while coal lost much more in terms of the percentage changes. And the reason for this, I would say, is the fact that the price levels that we see for the fuels today. Along with the CO2 has led to a stronger, uh, competition between the fuels, especially if we think about the power market in Germany.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 11:20

What are the key drivers here in terms of a day-to-day basis? Are, are they looking at the, the clean dark and the clean spark spread? IE the profits from generating coal and gas, and they can vary from day to day. So when you say strong competition, I'm just wondering, wondering what exactly you mean him.

Diana Bacila, coal analyst at Alpiq: 11:36

I'm mostly referring to the coal to gas switching mm-hmm. That we have, uh, seen and where the, the price of coal is located into this switching range. If we look at it in dollar per ton, we could of course look at it in euros per, per megabit hour as well. If you look on, on it from the, from the gas terms. So what we have seen is that due to the decline in the gas prices that we have witnessed this, uh, year in Q1, uh, we have seen stronger competition from gas. Uh, in the power market, which of course puts downside pressure for coal. Of course, the higher CO2 price would definitely be, uh, supportive or improved or higher gas power generation compared to coal power generation. But what I would say to, we can witness today in the market, it's a stronger interdependence between these three. And, uh, kind of keeping the, the price levels within the switching range.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 12:31

So it's more an interdependence rather than one or the other in a sense. Exactly. Yeah. How, how do you view this tuna?

Trine Braathen, carbon analyst at Kinect Energy Group: 12:37

I think, uh, the political side of this is kind a really relevant, um, because, um, all these countries having this face outs planned mm-hmm. Plans for coal, I think this is kind of putting the sentiment, uh, in the market and also contributing. To lower investments in, in Europe, and we see as coal is polluting more compared to gas, uh, with a lower production from coal, then basically in the long term you would have less demand for uas. Mm. Uh, so, and carbon allowances, so

Richard Sverrisson, Editor-in-Chief Europe, Montel: 13:21

that could drive the price down then in effect you said? Yes,

Trine Braathen, carbon analyst at Kinect Energy Group: 13:23

uh, in the long term, definitely. So in a coal

Richard Sverrisson, Editor-in-Chief Europe, Montel: 13:25

exit, lower carbon prices, it seems sort of counterintuitive. Um, we've discussed this before on the pod as well, but

Trine Braathen, carbon analyst at Kinect Energy Group: 13:31

Yes. Uh, and, uh, in my opinion it's, it really depends on how the government, uh, actually act on closing down, uh, these, um, coal power plants, uh, if they choose to actually voluntarily. Cancel the, uh, allowances, uh, similar the amount of emissions from the coal plants. Then of course it wouldn't be a, a bearish, uh, factor for the carbon price development. Then it will be more, uh, neutral. But of course it's, this is really difficult to predict'cause it's such a large investment for all of those. Uh, different countries and governments to really do those investments in purchasing the allowances and then cancel them, which it's like

Richard Sverrisson, Editor-in-Chief Europe, Montel: 14:20

burning cash.

Trine Braathen, carbon analyst at Kinect Energy Group: 14:21

Yes. Basically.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 14:22

And what, what the economics or finance ministry would do that. Yes.

Trine Braathen, carbon analyst at Kinect Energy Group: 14:26

Uh, and it has a really high cost for the government to do this. Mm-hmm. Uh, so it's, it will be really interesting to see the next couple of years, which countries actually. Going for this strategy. Mm-hmm. And who's not.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 14:42

Could I ask you to pinpoint a few where you think is most likely?

Trine Braathen, carbon analyst at Kinect Energy Group: 14:45

I think it's likely that, uh, Sweden mm-hmm. Would, uh, go through with, with this strategy. Uh, I think Germany will have a lot of pressure on their side to, to actually execute this. Mm-hmm. I'm a bit, uh, un hesitant to exactly estimate the numbers there. I don't believe they will do it for the a hundred percent volume. Mm-hmm. But. Maybe for some percentage in there. Mm. Which will support the prices. Mm. And of course, I believe France will, will go ahead with this canceling mm-hmm. Of free allowances. But of course, France don't have those emissions compared to to Germany. Mm. So again, we, Germany and Poland, for example, will be those two nations. We're really interested to follow

Richard Sverrisson, Editor-in-Chief Europe, Montel: 15:39

because Poland, these kind of

Trine Braathen, carbon analyst at Kinect Energy Group: 15:40

discussions. Yeah, of

Richard Sverrisson, Editor-in-Chief Europe, Montel: 15:41

course.'cause Poland doesn't really have the choice to switch to gas in a sense.'cause it's 90% dependent on coal fire generation. So I think there's quite a disparity in the options available across Europe and to, to switch, uh, to switch from coal to gas, if that's a fair assessment. But you, Donna, you, you mentioned in your presentation earlier as well about the certain amount of greenwashing that's going on here, and some, some miners in particular are, are mentioning that, you know. Hmm. No, uh, we are, we are not, uh, we're not gonna mine, we're not gonna open new mines because we're going green. But do you think there's something, something else going on here?

Diana Bacila, coal analyst at Alpiq: 16:16

Well, first of all,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 16:17

not naming any names, of course.

Diana Bacila, coal analyst at Alpiq: 16:19

First of all, we, uh, have to consider the, the capital flying out. In a way, the capital acts, I mean miners or producers of coal and also utilities now are facing some eras where the investors are running away from coal. Right. As we have seen, even the region pension fund coming out two days ago, were saying that there will limit production of, uh, we put caps on the production of thermal coal, and. Coal power generation. So this is one thing that, uh, first of all, uh, in a way, uh, prevents producers to, to put more money into developing mines. Hmm. But second of all, if you think about demand, as you, we have mentioned, and especially long term. Demand when you, it comes to the Coal Lake City in Europe. When it comes to China moving away to more cleaner technologies when it comes to all other countries, uh, trying to switch to cleaner fuels or investing more in renewables. We kind of have a consensus in terms of where coal demand is going and, uh, that's not a very positive trend, let's say. Mm-hmm. Therefore, it would be wise for you as a producer to basically. Not mine. More in the front in order to kind of deplete your minds, but wait a bit and kind of distribute this production for longer years as that will give you even higher margins on the longer term. So that would be my, so

Richard Sverrisson, Editor-in-Chief Europe, Montel: 17:38

you by saying you are not gonna open your mines, you're not saying you are gonna give up coal mining, you are just saying you are gonna wait a few years until you sell it.

Diana Bacila, coal analyst at Alpiq: 17:46

You are going, you are basically, when you were saying that you're capping your production and you're, or you're not investing or, uh. Opening your minds, what you're saying is that you, this basically gives you flexibility to mine whenever you find the price, gives you the higher margin, I would say. Sure, sure. So then, um, I would say that all producers should now be. More, um, let's say, um, careful or cautious in not repeating what we have seen back in 2015 when everyone was mining a lot, we got too much coal prices. Uh, we're facing a strong oversupply. However, these days when you see the demand is pretty, pretty sensitive to that. You would be better off adjusting or being able in a way to, to adjust your production.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 18:34

We are seeing, obviously Europe moving away from coal, not fully away. Um, and the US a mainly due to, I dunno, carbon pricing initiatives, but also some political moves in the USA. It's happened more because of, uh, the economics of, of gas. Where, where are the, where are the growth areas for coal in the world?

Diana Bacila, coal analyst at Alpiq: 18:54

Well, we will still have China

Richard Sverrisson, Editor-in-Chief Europe, Montel: 18:56

and you as analysis. I mean, where, where can you, I mean, if, if European Europe is, is. If Europe is kind of, you know, dwindling, then the, where is the growth areas is, what's what I'm asking here then? And I can tell you

Diana Bacila, coal analyst at Alpiq: 19:09

one thing, I'm not moving to China or in the United

Richard Sverrisson, Editor-in-Chief Europe, Montel: 19:11

States. Okay. That's very reassuring.'cause we, we haven't had, we don't have conferences there, Diana, so that's perfect. Yeah.

Diana Bacila, coal analyst at Alpiq: 19:16

So, but first of all, if we think about where is the growth sitting nowadays? We still have China, which will kind of keep the lion's share of this market. But China is also investing or growing. Its, uh, its energy balance with other technologies, especially wind, solar, nuclear China wants to become the biggest nuclear power producer in the world, and also gas of course. Uh, as we all already seen, has started, uh, entering the Chinese market, especially to replace coal during the heating season. Mm. So that's what we have witnessed, witnessed two winters in a row. Mm. Other countries would be India, but India also has its own coal production domestically, and they're trying to mine more in order to reduce dependence. But countries which plan to grow their economies using coal power are the ones located in emerging economies in Southeast Asia. Mm-hmm. And there we have, um. Along with India, Bangladesh, Pakistan, we have, uh, um, Indonesia, we have Vietnam, we have, uh, Thailand, uh, Malaysia. So all the countries, these countries are still basically relying as they can't really afford now to price carbon or, uh, to get rid of coal. And, uh, but another thing that I wanted to highlight is the fact that if you look on the plans, plans for investing in coal power plant projects in the future, each year. These plans are cut, slashed, left, basically just because it's much more productive, or let's say cheaper if you have, if you invest in a wind.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 20:46

Oh, so these are very sunny countries. Yeah, exactly.

Diana Bacila, coal analyst at Alpiq: 20:49

So that's the thing here. That's in a way the risk going forward that this pipeline of projects. Shrinks as narrows as we move along

Richard Sverrisson, Editor-in-Chief Europe, Montel: 20:58

with the fear of locking in some very expensive investments that a won't be needed in the in the future. And

Diana Bacila, coal analyst at Alpiq: 21:03

overall, in the future, everyone would have would basically move into the, where Europe is now heading into exit and pricing of carbon everywhere, imposing carbon floors. But we can't talk about these things now for the emerging economies, of course, but in the future we have to look on the 32. 34 years. Because, because

Richard Sverrisson, Editor-in-Chief Europe, Montel: 21:20

that's a good point. I think, um, Donna, you and you mentioned as well, Trina, the, the, the different etss around the world. I mean, are we, how far are we away from a global carbon price?

Trine Braathen, carbon analyst at Kinect Energy Group: 21:33

I think it's in this direction we are heading mm-hmm. I think it's many years before all the different, uh, market mechanisms are linked all together. Mm-hmm. That's a long way ahead. But we see that all of these national and regional market mechanism is entering into force every single year in actually all continents. We see them, uh, popping up. And of course when, uh, China is introducing its, uh, carbon market in 2020, uh, it will be the largest operating, uh, carbon market and will have a significant impact on. Also the development of new similar initiatives in in other countries, for example, in Asia.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 22:24

Mm-hmm. Interesting. I mean, if we can sort of finish off by talking about sort of more short term drivers, and for our listeners, what do you think will be the key areas for the remainder of the year for carbon prices for European carbon prices?

Trine Braathen, carbon analyst at Kinect Energy Group: 22:40

Yeah, it's, it's of course difficult to answer, but in my opinion, uh, the Brexit is still a very hot topic. Uh, and it could move prices potentially in both directions, even

Richard Sverrisson, Editor-in-Chief Europe, Montel: 22:52

if it's extended to the end of the year. Um,

Trine Braathen, carbon analyst at Kinect Energy Group: 22:54

yeah, in my opinion, depending on the outcome. Sure. Um, of course, if we have a hard Brexit in on Friday potentially, then of course we could do a risk of having a lot. Selloff in the market, which put a very bearish pressure to the carbon price. Uh, however, in the long term, if we see a year from from now, uh, a hard Brexit should actually support prices in the carbon market due to the fuel switching activity in the UK actually contributing to the surplus of allowances in total in the European Union. So, of course the, the, the Brexit is really one of the main or key drivers for the carbon development the next year. But I will also kind of mention, um, the political framework, um, which entered into force, uh, in January, 2019 with the market stability reserve, which is really affecting the auction volumes and the supplier, uh, allowances. I think this is, yeah, one of the main drivers for the price development, uh, also in the years to come, including 2019. And this is of course a political market and it will be reviewed in a couple years. So we could potentially have changes to the current framework, but at least. Um, some of the uncertainties we had back in 20, uh, 16, 20 17 is not there anymore, so this is really kind of supporting kind of the long term outlook in this market.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 24:41

And the political pressure is only likely to build further. I mean, there's already increased. I mean, there's already calls on the EU to increase its, uh, ambition for carbon reductions by 25. Yeah,

Trine Braathen, carbon analyst at Kinect Energy Group: 24:51

yeah. We see this, uh, very clearly in all countries in the European Union. They, they are in a very high pressure from stakeholders, including environmental organizations. Their, the population in general. Um, so this is a global trend, uh, and it's especially evident in, in Europe where they are striving to increase their ambitions and their environmental targets. And, and of course this affecting the price developments as well, and, and the sentiment and the price expectations in the future. Mm-hmm.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 25:31

So, yeah. Excellent. Perfect. Thank you. And Diana, is it all about China this year or is there, there must be other factors as well.

Diana Bacila, coal analyst at Alpiq: 25:37

It is all about China. Mm-hmm. And I think we should definitely take a very, very close look at all the policies that the Chinese government is, uh, coming out with. Mm-hmm. And at the same time, um, we should be careful, uh, what is going on on the producer side, trying to kind of understand. If they really adjust or

Richard Sverrisson, Editor-in-Chief Europe, Montel: 25:59

on the Chinese production, coal on the global or global, global coal market, coal production, global market, say like basically

Diana Bacila, coal analyst at Alpiq: 26:03

all the producers, how they respond to the price level that we see today.'cause overall it's $30 down from the beginning of the year in the end. So there should be something happening slowly, of course, because we are talking about coal, not, we can't just, uh, pull, uh. Open a tap or close it, it's mining and that that's a, a more difficult or, uh, process or a lengthy, let's would say. And at the same time, we should keep an eye on gas. How, uh, gas, uh, plays out with coal. Of course, the CO2 remains big, big, uh, driver this year and has been both for the, the fuels and the power market itself. So I would say, um, China cost of production or producer's behavior to these price levels and the gas price, uh, and how coal to gas switching reacts combined with the CO2 would remain the main important drivers to follow in 2019.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 26:57

So certainly enough to keep analysts and journalists very busy. And Europe and in and in Europe, of course. Exactly. Exactly. Diana and Trina, thank you very much for joining me today. Uh, an excellent discussion. And, uh, and an interesting debate about what, what have been the drivers and what, what to look out for going forward. So this is Richard Verson signing off from, uh, the Weekly podcast. Uh, please remember to keep yourself updated on Montel News, and we're on Twitter and LinkedIn. Thank you very much. Thank you very much. Goodbye.