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Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
 Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says that import demand will still meet previous high expectations, although overall demand growth will be lower. This is due to lower seaborne coal prices compared to domestic coal prices in coastal China. As such, domestic producers are competing for market share by lowering prices in spite of negative margins. This explains the recent continuous drop in Chinese coal prices. However, Wood Mackenzie says that coastal China coal prices will be supported at *RMB500 per tonne (t) as at this price level 40% of domestic supply operates at negative margins.
China's gross domestic product (GDP) growth has slowed from 9.3% to 7.5% from 2011 to 2013. As a result, power demand growth has slowed in China and coal demand in coastal provinces has remained flat, staying at 2011 levels of 1.2 billion tonnes(Bt). In contrast, seaborne demand increased rapidly - This year, Wood Mackenzie expects China to import 235Mt of thermal and 67Mt of metallurgical coal, up from 168Mt and 31Mt respectively in 2011. This translates to a growth in share of seaborne imports into coastal China from 17% to about 25% between 2011 to 2013.
Wood Mackenzie's Senior Analyst Coal Market Research, Mr. Prakash Sharma says, "The trend of increased coal imports has been aided by weak coal prices in the international market. This means that Chinese coal import demand is almost entirely driven by the competitiveness of imported versus domestic supply. As such, large Chinese miners are adopting volume strategy by producing more to bring down operating costs and pricing lower to maintain market share."
These measures will hold market share in the short-term but may be counter-effective if prices fall too low in coastal China. Therefore we believe prices find a floor at RMB500/t. Small to medium sized domestic players will be most affected due to relatively high fixed labour costs and mine safety expenses in China. Large producers such as Shenhua and China Coal, who have resorted to aggressive pricing, contribute almost 50% of China's domestic coal production. The remainder 50% comes from the small to medium size miners.
Rohan Kendall, Senior Analyst for Coal Supply Research, says, "At RMB 500/t, we estimate that 40% of China's thermal coal production will produce at negative margins. Small to medium sized producers operating at negative margins, particularly those producing low-energy coal, face a real risk of mine closures. The situation may also trigger further consolidation of small loss-making mines in China."
Summarizing, Mr Sharma says, "The 40% of domestic production producing at negative margins equates to about 150% of the size of the current seaborne market. Full replacement volumes cannot feasibly be sourced from imports without creating a price response that will actually incentivise domestic miners to remain in production. Therefore, we believe prices will be supported above RMB 500/t, turning the tide on the current price trend."
*All prices refer to benchmark FOB Qinghuangdao Thermal coal price (5500 kcal/kg NAR basis) inclusive of 17% VAT.
Editor's notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world's energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
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Thursday, 03 October 13
INDONESIA AUGUST COAL EXPORTS FALL 12.90 % FROM JULY TO 30.71 MIL MT
COALspot.com: Indonesia, the 15th largest economy in world, 4th largest coal producer in world and world's largest multi grade coal exporter ...
Thursday, 03 October 13
TOP FOUR U.S. COAL COMPANIES SUPPLIED MORE THAN HALF OF U.S. COAL PRODUCTION IN 2011 - EIA
In the past two years, more than half of U.S. coal production was attributable to the top four coal producers, the result of changes in regional pro ...
Thursday, 03 October 13
HANDY: PERIOD MARKET STAND IN GOOD POSITION - FEARNRESEARCH
Handy
Nickel ore and Bauxite was active last week but slowed down now due to Chinese holidays. Ships opened in North China fixed at US$ 11-13k leve ...
Wednesday, 02 October 13
DRY BULK MARKET IS STILL MAINTAINING ITS UPWARD DIRECTION
Chartering (Wet: Stable- / Dry: Firm+)
Despite the fact that rates for Capes didn't continue their crazy ride this past week, the Dry Bulk market ...
Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
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Showing 4086 to 4090 news of total 6871 |
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- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
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- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
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- Wood Mackenzie - Singapore
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- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
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- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
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