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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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Monday, 17 February 14
Q1 2015 COAL SWAPS CLOSED $ 2.21 HIGHER THAN Q2 2014 SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 3.16 percent month on month and closed at US$ 76.12 per mt as o ...
Sunday, 16 February 14
SUPRAMAX : THE FAR EAST/SE ASIA CHARTER RATES FIRMED UP
COALspot.com: The freight market had a mixed reaction this week with BDI increased by 1.37 pct and closing at 1106 points on Valentine day. The cape ...
Friday, 14 February 14
US COAL PRODUCTION STILL SLIPPING
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.9 million short tons (mmst) of coal in ...
Thursday, 13 February 14
PANAMAX : NOT ENOUGH REQUIREMENTS TO KEEP THE ATLANTIC MARKET FLOATING - FEARNLEYS AS
Handy
After the Chinese holidays the week started on a positive note. Owners are talking higher rates but chrtrs are still somehow reluctant to mov ...
Thursday, 13 February 14
DRY BULK MARKET FACES BETTER PROSPECTS ON THE BACK OF IMPROVING DEMAND AND SUPPLY BALANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has started off the New Year on the "left foot", with the strong finish of 2013 proving to be unsustainable, on the ba ...
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- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Planning Commission, India
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- PTC India Limited - India
- The University of Queensland
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
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