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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, 25 October 13
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED TOTALLED 803.1 MMST
COALspot.com – United States the world’s second largest coal producer produced approximately 19.10 million short tons (mmst) of coal in ...
Thursday, 24 October 13
PANAMAX: RATES SLIP ACROSS BOTH HEMISPHERES
Handy
We were back from holidays but still not much enquiries in the market. Overall future direction is uncertain. Currently, ships passing Singap ...
Thursday, 24 October 13
SHIP PRICES ARE INCREASING ON THE BACK OF IMPROVED MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating from its recent highs, ending yesterday at 1,786 points, down 61 points on the day, with Capesizes leadin ...
Wednesday, 23 October 13
DRY BULK MARKET HAS SHOWN SIGNS OF STABILITY - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable-)
The Dry Bulk market has shown signs of stability this past week, with the sole exception of Capes, rates f ...
Wednesday, 23 October 13
MARKET SENTIMENT IN THE DRY BULK SECTOR REMAINS POSITIVE - YANNIS OLZIERSKY
Market sentiment in the dry bulk sector remains positive despite the latest correction in freight rates for the Capesize sector, which are sliding f ...
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- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Australian Coal Association
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Minerals Council of Australia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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