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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, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
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Friday, 23 February 24
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Friday, 23 February 24
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Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
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Monday, 19 February 24
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Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
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