We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 28 March 14
CHINA'S ENVIRONMENTAL MEASURES WILL NOT CURB GROWTH IN DOMESTIC STEEL PRODUCTION AND SEABORNE IRON ORE - WOOD MACKENZIE SAYS
 Steel plants in China have been targeted as a major source of the toxic smog enveloping Beijing and Shanghai. Emergency measures have been imposed on regional steelmakers with mills in Tangshan ordered to suspend at least 30% of production and idle coke batteries and sintering operations. Longer term measures include the introduction of more stringent emission controls. Wood Mackenzie notes that although this move has created market wariness for China steel production and iron ore demand, the impact on steel production will be minimal. This is because there is plenty of unused capacity within China's steel industry ready to replace any lost production, due to shut downs resulting from enforcement of the new emissions regulations. However, improving the environmental performance of Chinese steel plants will add further cost pressure to an already ailing industry. Mr Paul Gray, Principal Iron Ore Markets Analyst at Wood Mackenzie says, "The iron ore market is understandably spooked by what's going on in China due to the introduction of the environmental controls and their potential financial impact on the steel industry. This has sparked much uncertainty and speculation. This is one factor that has caused price volatility, with prices plunging to 17 month lows in recent weeks before picking up again very recently. However, during the remainder of 2014 we expect that fighting emissions will have negligible impact on total Chinese crude steel production and limited impact on iron ore demand in terms of quantity, with Chinese imports of iron ore predicted to rise by a further 90 million tonnes (Mt) in 2014 to a record 921Mt."
Dr He Ming, Steel Cost Consultant at Wood Mackenzie, adds, "Steel companies need to put emissions control measures in place. However, given that most Chinese plants are tight on capital after years of near-zero margins, they will struggle with the additional costs required to implement the necessary measures and many companies will be looking for a way to pass the cost onto consumers." To achieve emissions levels on a par with their counterparts in Japan or South Korea, most steel plants would have to invest and incur more than RMB 50-60/t (US$8.3-10/t) of additional operating cost, further eroding their already narrow margins. This comes following the announcement that the average net profit margin at steelmakers in 2013 was just over 0.64% for 86 of China Iron and Steel Association's (CISA) key steel enterprises.
If steel companies are unable to meet the new lower emissions targets, they may be forced to temporarily or even permanently shut production but Wood Mackenzie expects the targets will have more impact on small scale non-CISA steel plants. These smaller plants have outdated emissions control facilities and are estimated to have emission levels three to four times higher than their CISA counterparts. Dr He says, "Non-CISA steel plants contributed to less than 20% of China's steel production in 2013 therefore although an aggressive plan of capacity closures has been announced by the central and local governments, the scale of closures is expected to have a limited impact on a steel industry that is suffering from chronic overcapacity."
"Additionally, most of the announced closures to date have been for capacity already idled or curtailed for other reasons, with the lost production picked up by the larger steel plants. It is unlikely that we will see forced closures amongst the larger plants as this move will not reduce emissions significantly. Moreover, it will have a detrimental effect on local economies by creating large numbers of unemployed workers and unpaid debts. This is not ideal, especially since Xi Jinping's government is encouraging a market-based economy with increased domestic consumer power. Therefore we do not expect closures of the larger scale plants to be the next step enforced."
With the concept that environmental regulations will apply to each steel plant fairly, regardless of size or whether it is privately or state-owned, this would shift the entire Chinese steel industry cost curve higher and further erode margins. It is therefore likely that these incremental cost increases will be passed on to end users. Moreover, since sintering is the most polluting process within a steel plant, some plants will look to replace sinter rather than incur the additional operating costs required to meet new emissions standards. Sintering is responsible for 80%-90% of total dust and soot emissions and more than 60% of total sulfur emissions from the steel industry.
Wood Mackenzie anticipates that replacements for the sintering process will result in an increase in demand for the more expensive, higher quality and environmentally-friendly raw materials like iron ore lump and pellet; supporting higher premiums for these products. There will be a natural cap on how much capacity can be switched away from sinter to higher quality feed as the price premium will become equal to the additional cost of implementing the necessary environmental measures.
The limited impact on steel production accounts for the minimal consequences for iron ore demand. Mr Gray adds, "Of longer term significance is the seaborne market's anticipated transition as it moves towards a position of excess supply capability when Chinese demand struggles to absorb all the additional seaborne supply earmarked for the this year and next. 2014 will certainly be a transition year for iron ore but we think this is not necessarily related to China's environmental measures it's more symptomatic of rising Australian supply and slowing Chinese demand."
Dr He concludes, "Government and steel companies will need to work together to protect the industry while still gradually improving emissions. On the company-side, we expect China's larger steel plants will take alternative measures to meet environmental requirements but they will incur extra costs of implementing emissions control facilities in the longer term. On the government side, a more effective way to curb pollution is to improve monitoring methods at individual plants. This will enable the government to impose heavy fines on those with emissions beyond a well-defined threshold, while incentivising those with lesser emission levels by offering subsidies to offset extra costs incurred."
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
|
|
|
Showing 46 to 50 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Deloitte Consulting - India
- The University of Queensland
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
|
| |
| |
|
