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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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Sunday, 22 September 13
BDI STRENGTHENS FURTHER AS CAPESIZE FREIGHT RATES JUMP - CAPT. REDDY
COALspot.com: The freight market continued its upward trend and maintaining the moment with BDI and Cape index up by 16 pct week on week. The Capesi ...
Sunday, 22 September 13
API 8 CFR SOUTH CHINA COAL SWAPS ADVANCE
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Sunday, 22 September 13
SUB-BIT INDONESIA COAL SWAPS REMAIN UNDER PRESSURE
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 2.09 percept month on month on Friday 20 September 2 ...
Friday, 20 September 13
SHIP OWNERS INVEST MORE THAN $9.2 BILLION ON NEW BUILDING VESSELS DURING AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity ...
Friday, 20 September 13
DRY BULK MARKET REACHES NEW HEIGHTS THIS WEEK STANDING AT THREE-YEAR HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The biggest rally of the dry bulk market in more than three years have brought back joy among ship owners, especially those active in the Capesize m ...
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- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
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