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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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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
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