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Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
 As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while large coal consumption provinces are in short supply of power coal.
This structural contradiction between supply and demand in China's coal market has highlighted heated discussions recently.
Coal producers facing mounting pressure of excess in output capacity
China is facing severe excess of production capacity and oversupply of coal in 2010 due to the expansion of coal production and surging imports amid sluggish demand, and this situation is expected to carry on into 2011 as new coal companies begin operation.
Wang Zhanjun, director-general of the China Coal (TSXV:CKO) Industry Association, said that China's coal supply capacity has seen a remarkable increase in 2010 due to the operation of newly formed coal companies after mergers and acquisitions.
In the first 11 months of 2010, the country's leading coal producing provinces and regions including Shanxi, Inner Mongolia, Shaanxi, and Ningxia all saw more than 20 percent growth in coal output.
According to a report by the association, in the first 11 months of 2010 China's coal output surged 15.5 percent or 418 million metric tons (tonnes) year on year to 3.039 billion tonnes, while coal sales were up 13.5 percent or 390 million tonnes to 2.892 billion tonnes. Coal deliveries increased by 15.3 percent year on year to 1.827 billion tonnes during the same period.
The investment in fixed assets in the coal industry has continued to increase this year. In the first 11 months of 2010, fixed assets investment in coal mining and washing saw 22.7 percent year-on-year growth to 320.7 billion yuan.
Meanwhile, China's coal imports keep rising while exports keep declining. In January-November, China's coal exports dropped 13.5 percent to 17.58 million tonnes, and are expected to remain low in December. Total coal exports are estimated at 19 million tonnes for the whole year.
In sharp contrast to declining exports, coal imports maintained fast growth in 2010. Net imports of coal are expected to reach 145 million tonnes in 2010.
However, China's coal demand has remained sluggish this year. Affected by the measures for energy conservation and emissions reduction, electricity consumption growth of high energy-consuming industries like ferrous metals, chemicals, non-ferrous metals, and building materials has fallen back quickly since May of 2010, which in turn has cut coal consumption severely.
Coal consumption in the steel industry moved from positive growth to negative growth in 2010.
According to official statistics, China's daily crude steel output saw fast growth in the first half of 2010 but registered three months of negative growth in the third quarter, and only increased 4.8 percent in November.
Also, coal consumption in the chemicals industry has also remained sluggish this year. According to preliminary forecasts, coal consumption in the chemicals industry in 2010 will stay at the same level as in 2009, at 140 million tonnes.
The China Electricity Council predicted that electricity demand in China would not increase much in 2010 and 2011, estimating the growth at 10 percent in 2010, 14 percentage points lower than in 2009.
Therefore, coal industry is expected to face mounting oversupply pressure in 2011 since the output of majority coal enterprises would double. Meanwhile, large numbers of coalmines in Shanxi, Henan, Shaanxi, and Inner Mongolia are scheduled to begin operation in 2011, and the coal oversupply will be aggravated by the participation of more downstream firms in power generation and metallurgy, said Wang Zhanjun, head of the China Coal Industry Association.
Wang predicted that coal supply in China would increase 300 million tonnes in 2011, and China would face excess in supply of coal.
Short supply of coal at power plants
In sharp contrast with the excessive output and supply of coal, a number of power plants in parts of China are suffering from shortages of power coal.
In Guizhou province, coal output capacity is significantly less than demand. The local coal output is expected to increase by 160 million tonnes at most in 2011, which would exacerbate the tight supply. This is because the output capacity of newly formed coalmines is inadequate to make up for eliminated production capacity, and the newly formed capacity will not come into operation until the second half of 2011.
At the same time, power plants in Guizhou cannot afford coal produced outside the province because of higher coal prices.
Similar short supply of coal has also occurred in Hubei province. Coal stocks at power plants in Hubei have remained at critical level since the beginning of this year, and sometimes were even not enough for one week's consumption.
The power coal shortage is not only a headache for power plants in non-coal production areas, but also hit power plants in major coal production areas like Shanxi and Henan.
Take the Datang Taiyuan Second Thermal Power Plant for example. The plant has suffered coal shortages four times since the beginning of 2010 because its contracted coal supplier supplied only 400,000 tonnes of coal towards meeting the 1.5-million-tonne coal contract.
As of December 4, power coal stocks of Henan have slid sharply from 3.84 million tonnes at the beginning of November to 2.65 million tonnes, far below the critical level of 3.5 million tonnes.
This has led to a daily supply shortage of 700,000 tonnes. Current coal production system might be primary cause
The short supply of power coal against excess of overall output capacity in China is believed to be caused mainly by system contradictions existing in the coal industry.
Actually, China's coal industry has trapped in a strange circle. Coal demand weakens after power plants stockpile power coal, but after the stockpiling, coal stocks of coal producers are down. Therefore, the coalmines produce more coal, which eventually leads to excess of output and excessive supply of coal.
Some coal suppliers have complained that if they carry on supplying coal according to their coal contracts with the power plants at the contracted price, the coalmines would all suffer (OOTC:WLVTQ) losses while the power plants all make profits.
A senior manager of the Shenhua Group said that it is difficult to avoid the structural contradictions of disjointed coal output and demand under the current government-capped management system. The outlook of China's coal industry remains troubled for 2011, and the problem of excessive output capacity would continue to be widespread in China, especially in western areas.
According to the manager, branches of the Shenhua Group in Xinjiang are all in the red due to heavy coal inventory pressure, while some provinces in east and south China are suffering from severe shortages of coal.
An insider with the Shanxi Coking Coal Group said that the group was ambitiously planning to double its output capacity during the period of the 12th Five Year Plan (2011-15), but the current market environment is very unfavorable for the coal industry. The cost of acquiring small coalmines has spiraled far beyond expectations.
Therefore, the mismatch between coal supply and demand at the turn of the new year is manageable, and the market is expected to see increasing supply and decreasing demand soon, noted the insider.
But Wang Xianzheng expressed disagreement. He believed that China's coal demand would increase by 200 million to 300 million tonnes in 2011. Besides which, the government-planned construction of 10 million units of affordable housing would drive coal demand by 60 million tonnes at least. Wang believed that the coal price would remain buoyant in 2011 but would not rise much.
Source: Quotemedia, Xinhua News Agency (Edited by Li Xiaohui), istockanalyst
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Friday, 29 October 10
CHINA'S COAL DEMAND DRIVES DRY BULK MARKET HIGHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is posting marginal, yet steady growth this week, with the Baltic Dry Index rising yesterday to 2784 points, up by 0.2%. Both th ...
Wednesday, 27 October 10
TNPL TO AWARD 240,000 MT COAL SUPPLY CONTRACT TO COAL & OIL
COALspot.com: Tamil Nadu Newsprint Papers Limited, Tamil Nadu state owned Newsprint and Printing & Writing Paper producer has opened a coal purc ...
Wednesday, 27 October 10
CHINA AIDS RUSSIA IN DEVELOPING COAL RESOURCES - PEOPLE'S DAILY
People's Daily reported that, Russia will use 6 billion U.S. dollars in loans provided by China to develop coal resources in Sakhalin Island, Elege ...
Wednesday, 27 October 10
MAIDEN COAL SHIPMENTS TO NOBLE RESOURCES - PAN ASIA AUSTRALIA
Press Release :
First Coal Shipments made from Nadvara Coal Project, East Kalimantan
51,616 tonnes delivered from October production &ndas ...
Tuesday, 26 October 10
INDONESIA SHIPPED 5.32 PERCENT LESS COAL IN SEPTEMBER 10
COALspot.com: Indonesia, the world largest coal exporter, shipped 21,661,817 MT of coal in September 2010, which is 5.32 percent lesser than Au ...
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- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Planning Commission, India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
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