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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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- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
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- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- ASAPP Information Group - India
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
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- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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