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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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Thursday, 07 November 13
THE ENERGY INDUSTRY'S RISING WATER CHALLENGE - WOOD MACKENZIE
Water poses a variety of business risks for the energy industry, and could play an influential role in shaping the future energy supply mix, accordi ...
Thursday, 07 November 13
HANDY : INDO/CHINA ROUNDS ARE SEEING BIDS AT AROUND $16K
Handy
In the Atlantic we have seen more activity this week with several fixtures being concluded at firm rates. USG/Feast been reported at 30k and ...
Wednesday, 06 November 13
THE BIGGER SIZE SEGMENTS LOST GROUND WHILE SUPRAS AND HANDIES HELD ON TO THEIR GAINS - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable- )
A mirror image of the week prior for the Dry Bulk market, as once more the bigger size segments los ...
Wednesday, 06 November 13
WILL NEW ORDERS DRIVE THE MARKET DOWN AGAIN ONCE DELIVERIES COMMENCE
"While there are many concerns on whether the new orders will drive the market down again once deliveries commence, the second half of 2013 has ...
Tuesday, 05 November 13
AUSTRALIA'S NEWCASTLE PORT SEES DROP IN COAL EXPORTS W-W
COALspot.com: In the week ended November 4, Power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.77 m ...
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- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
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