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Monday, 07 February 11
COAL PRICES ON RISE: DEMAND FROM INDIA AND CHINA - ANALYZED SUNIL K KUMBHAT
 INDONESIA IS HEART OF ASIAN COAL BOOM
COALspot.com - Rising demand of Coal from India and China, coupled with global financial recovery, is driving thermal coal prices that have appreciated in the recent past few months and it is expected that the global prices of Coal shall remain firm and go up further.
Power generation is what is driving the demand of Coal in India and China . In India new coal-fired power plants, ranging in the size from 50 MW to 4,000 MW, are being built throughout India. Power plants are symbol of how rapidly India's economy is expanding.
Similarly China, shall remain a net importer of thermal coal for coming few years as it's economy is growing at firm speed and is expected to deliver mind-boggling growth in 2011. China's coal imports more than doubled to 150 million tonnes from the previous year. Closure of smaller mines, coupled with increased demand from power sector, has triggered China's demand for imported coal.
India has also emerged as one of the major importer of coal. The imports are likely to be around 100-150 million tonnes for the current year as it adds new thermal capacities. India imports about three-fourths of its coal requirement from Indonesia, while South Africa and Australia accounts for the rest.
The quality of Indonesian coal is much better than Indian coal. The gross calorific value of Indonesian coal ranges between 5,000 and 6,500 kilo calories per kilogram (kcl/kg); while for Indian coal it is only 3,000-4,500 kcl/kg- with high ash contents. Bulk of the imported coal in India is used by power companies, which use it to blend with the local coal to improve calorific value. The coal prices also depend upon the ash content and the calorific value .Indonesia’s strategic geographic location makes it the most preferred country for Indian companies for its proximity to the country, which means lower ocean freight charges and better timing compared to other countries such as Australia.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
The higher energy demand in India would drive up import of coal .The overall energy generated in India could double within a decade.
Indian power sector will be heavily depend on coal for decades to come. At the same time, India's steel industry, also dependent on coal, is expected to treble its output within a decade.
But there is growing concern about where all the coal is going to come from. India has significant coal reserves suitable for power generation and boasts the world's biggest coal company - the government-owned Coal India Limited. But the expansion of the Indian economy has been so rapid, demand is outstripping domestic supply.
The government wants the economy to expand at 9-10 per cent a year to help lift millions of poor families out of poverty. But an energy supply crunch could compromise that growth target.
India has theoretically significant reserves but it will take a long time to get into actual production, There is a urgent need to re-examine the regulations and policies associated with exploration, exploitation and production. India is still not fully encouraging commercial coal mining by the private sector.
India's coal reserves are concentrated in the eastern states of Orissa, Jharkhand, Chhattisgarh, West Bengal and Madhya Pradesh, where basic logistics infrastructure (such as ports and railways) is lacking. Various government regulation concerning forestry and environmental restrictions are also hindering mine development. Unless such bottlenecks are addressed, growth in domestic coal production could be difficult.'
Due to government regulatory delays, infrastructure bottlenecks and security risks are encouraging Indian firms to look overseas to secure coal supply especially in Indonesia, South Africa, Mozambique, Australia etc. for their ambitious power projects in India.
Indonesia's thermal coal mines have a comparative advantage over Australia's because they are nearer to India but Australia's reputation as a reliable supplier is attractive to Indian buyers.’ Australian mines might be more expensive but they are reliable. Australia’s advantages are that the coal is good and the infrastructure is good'
In spit of all , Australia will face stiff competition from Indonesia - which has lower transport costs. A significant proportion of coal transport in Indonesia is water based, which allows for coal to be transported along rivers via barges to the open sea for loading onto larger vessels. Indonesia’s coal suppliers rely heavily on floating transhipment facilities due to economic reasons.
Indonesia's coal Industry has transformed itself from being an minor player in Asia's Coal market to the world's largest Exporter of Steam Coal .Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter.
Indonesia’s government needs to accelerate reforms for foreign direct investment (FDI) in mining and energy sector to give direct control to foreign investors, in order to win confidence and attract/invite major international companies into Indonesia. There is need of more coordination between Ministry of Energy and Mineral Resources Deptt , Indonesian Investment Co-ordination Board (BKPM) ,and Various Regional administrations.
The phenomenal growth in Indonesia’s coal exports in last five years reflects the ability of its coal industry to respond to the rapid growth in Asian demand for thermal coal.
Indonesia has huge coal reserves and exporting coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies (Tata , Reliance,Jindal ,L&T, Monnet, Adani ,Essar etc) are capable of sharing power technology and setting up mega power plants in Indonesia
Indonesian private companies can buy equity stakes in Indian power plants in exchange / barter for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties .Indonesian government or Indonesian companies can invite Coal barter bids (CBB) ,where from foreign companies for development of ports , Roads , Railway lines , Power Plants etc. In Coal barter bids , coal will be supplied to party who will set up Power plants or develop infrastructure etc. Coal mining in Indonesia can be an extremely lucrative sector for overall economic growth. Indonesian government should make single window clearance system to operate business in Indonesia to encourage foreign enterprises and Investment for Coal barter bids. Indonesian Coal companies are fully aware that India is a market into which they can export or thru barter transactions, its major share of Coal Production.
Today Indonesia has stable economic outlook and if reform efforts towards basic infrastructures continues it may become Economic Tiger of Asia by 2020.
Today Indonesia is the heart of the Asian Coal boom.
Analyst - Sunil K Kumbhat , Jodhpur (Rajasthan), India
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
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