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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, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
Friday, 18 October 13
DRY BULK MARKET ON "PAUSE" MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on "pause" mode over the past week, after China's return from the week long holidays. The industry's benchm ...
Friday, 18 October 13
US PRODUCED 6.7% MORE COAL W-W
COALspot.com – United States the world’s second largest coal producer produced approximately 18.9 million short tons (mmst) of coal in a ...
Thursday, 17 October 13
CAPESIZE: RATES ARE AGAIN MOVING UPWARDS - FEARNRESEARCH
Handy
Activities were obviously slowed down in the Pacific basin. There were only few coal movements which fixed around USD 15-16k for ships in Sin ...
Thursday, 17 October 13
SGX TO LAUNCH "SGX THERMAL COAL FUTURES" NEXT MONDAY
COALspot.com: SGX is to launch two thermal coal futures contracts, SGX API 8 CFR China Coal Index Futures and SGX IHS McCloskey Indonesian Sub-bit F ...
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- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- The University of Queensland
- VISA Power Limited - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Australian Coal Association
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
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