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Tuesday, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research analyst, Eva Tzima, "since the beginning of 2013, there has been a lot of debate as for what the future might hold for the trade of coal. The majority of coal production is used to fuel coal-fired power plants in the form also known as thermal coal. Coal, which is today the source that feeds almost 40% of global electricity requirements, has been the fastest growing energy source since the beginning of the 21st century, ac-cording to the International Energy Agency. It’s been mainly on the back of developing economies, like those of China and India that the traded volume of the commodity has witnessed a rapid increase. With China being globally the biggest producer and consumer of thermal coal, the demand for the latter has been inextricably linked with that of economic growth in the world’s second largest econo-my. As the rate of Chinese economic growth has been slowing down, so has the rate of coal consumption, while at the same time, due to its non green nature, the popularity of coal as an energy source has been gathering less and less supporters worldwide", she noted.
Tzima added that "despite the fact that China has been sitting on trillions of tonnes of reserves and therefore local appetite for coal has been historically satisfied onshore, as of the end of 2008 the country’s coal imports have started to increase at a very fast pace. The big beneficiary of this trend was no other than the dry bulkers, as the majority of those imports is realized by seaborne trade. Last year alone the an-nual increase of imported amounts of coal into China touched al-most 60% compared to those of 2011. As we head into the final quarter of 2013 it seems that an even higher figure of imports will be printed, proving that the trend is still strong. A little less than one third of Chinese coal imports is currently being satisfied by Indonesian reserves, while other Pacific region countries like Australia and Vietnam also account for substantial portions".
According to Intermodal's analyst, "the question that naturally comes to mind is why turning to offshore supplies for coal when the commodity is plentiful right there in your court? The answer is simple; Price. The cost of producing and transporting coal domestically has been higher than importing it. But as the country’s imports have continued to rise and its economy has gone into a slower gear, Chinese stockpiles have also increased significantly, fact which in its turn has put significant pressure on local prices. Since January alone, coal prices in China have softened more than 15%. As local prices have been softening a lot of reports have surfaced warning about possible pressure on coal imports going forward. On top of that, the Chinese government, in its effort to pursue more environmental friendly policies, could also weigh down on the future quantity of coal cargoes imported. The energy targets initially set forth by the government, as part of its overall pollution control plan, included both a ceiling on the imported volume and use, as well as a floor on the quality of coal consumed in the coun-try, adding further to the negative sentiment around coal usage altogether", Tzima noted.
"So, will the trade of coal start burning low in the Pacific region? I would think that most probably not. On the one hand the infrastructure modernization needed, should the government keep pushing for lower emissions of CO2, will add on to the cost of Chinese pro-duction. This will be reflected on the price of locally produced coal, restricting the gap between domestic and international prices to narrow down to a point where imports would no longer make economic sense. On top of that, while local coal prices have been softening, the same has happened to coal prices globally and even at a higher degree, so the price incentive for Chinese demand to dis-tant itself from imports doesn’t appear to be there. At the same time what originally started as a very solid plan to cap imported quantities has slowly been revised to a less strict policy, which doesn’t seem as hurtful for imports as it was in its initial form. This revision shows that cheaper energy sources are likely to hold centre stage, as it seems quite possible that the Chinese government would chose to partly sacrifice its “Green” targets for its “Growth” targets. In fact while it has pledged to reduce the country’s coal usage to 65% of its total energy mix, a 2% reduction from what it is today, it hasn’t set a specific amount of coal consumption. This means that under the current plan, the Chinese will still allow for growth in coal consumption should the country’s energy needs continue to rise. But will they do? In my view the fact that the Chinese government has compromised with slower economic growth targets for a longer period of time, in order to ensure the sustainability of that growth, in itself is supportive of firm on-going energy consumption within the country. Following the path of slower but more sustainable growth, energy consumption should be maintained at its current growth levels rather than exhaust itself in the medium term follow-ing strong but short-lived periods of overconsumption.
So despite the fact that King Coal might be facing some opposition, it seems that the Chinese will continue to be supportive of both imports and consumption of the commodity. And unless dramatic action is taken by their government, imports should keep increasing in the next years. This will almost certainly be an increase at a slower rate, but an increase nevertheless, as cheaper options of the commodity will be still made available through seaborne trade in the Asia-Pacific region, allowing for coal to keep burning hotter for a longer period than what some might chose to think...", Tzima concluded
Research Analyst - Eva Tzima
Source: Nikos Roussanoglou, Hellenic Shipping News
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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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- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Australian Coal Association
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
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