In May this year the reference price of coal, used to determine the amount of potential budgetary subsidies for mines, was the lowest in over a year and amounted to PLN 32.53 per gigajoule of energy obtained from coal, compared to PLN 36.41/GJ in April this year. – added the Industrial Development Agency.
The level of the reference price lower than in May – PLN 27.51/GJ – was recorded only in March last year, when the Industrial Development Agency calculated this indicator for the first time.
As the Agency announced on Tuesday, cumulatively, in the period from January to May this year, the reference price amounted to PLN 42.12/GJ, while in the entire last year, from January to December, it was PLN 50.68/GJ cumulatively.
The monthly determination of the reference price by ARP, expressed in zlotys per gigajoule (PLN/GJ), is related to the implementation at the beginning of last year of the statutory mechanism of subsidies to reduce the production capacity of hard coal mines. The subsidies are supposed to cover the difference between the actual revenues of coal companies and the revenues that coal producers would obtain by selling the raw material at the reference price.
Pursuant to the regulation of the Minister of State Assets, the reference price is the weighted average monthly unit price of steam coal imported to Poland from outside the European Union. This price includes the calorific value of imported coal and is expressed in PLN/GJ. The Agency calculates the reference price on the basis of reports on imports and imports of hard coal to Poland. On the basis of the regulation changed in October last year, IDA calculates the reference price on a monthly and cumulative basis.
In March last year, when ARP calculated the reference price for the first time, it amounted to PLN 27.51/GJ, in April PLN 42.24/GJ, in May PLN 52.80/GJ, in June PLN 54.76/GJ PLN 59.79/GJ in July, PLN 62.20/GJ in August, PLN 58.12/GJ in September, PLN 45.82/GJ in October, PLN 51.50/GJ in November, PLN 48 in December /GJ, in January this year. PLN 49.02/GJ, in February PLN 42.64/GJ, in March PLN 35.82/GJ, in April PLN 36.41/GJ, and in May – according to the latest data of the Agency – PLN 32.53 for gigajoule.
The point of reference for the reference price may be the values of indices showing the average selling prices of coal by Polish mines, published monthly by the Katowice branch of the IDA. The value of the coal index for the energy sector in May amounted to PLN 33.64 per gigajoule of energy generated from coal (slightly more than the May reference price), and the coal index for heating was PLN 42.08 per gigajoule (significantly above the reference price).
According to ARP data, this year’s May brought a further decline in coal prices in the world – in Western European ARA ports (Amsterdam, Rotterdam, Antwerp) they decreased by 8.1% compared to April. and were by 58.7 percent. lower than the year before. Converted to the conditions of ARA ports, the value of Polish indices in May this year amounted to USD 202.24 per ton of coal for power generation and USD 252.94 per ton of coal for heating.
The reference price published by the Industrial Development Agency is used to calculate the value of potential budgetary subsidies to reduce the production capacity of mines. Last year, the largest coal company – Polska Grupa Górnicza – received about PLN 1.4 billion in this respect: PLN 800 million in cash and PLN 600 million in bonds. This year, PGG does not use subsidies to reduce production capacity.
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