We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Thursday, 29 January 15
CHINA ENERGY DEMAND MUST BE REVIEWED DUE TO FUNDAMENTAL ECONOMIC CHANGES - WOOD MACKENZIE
 New patterns emerging as energy demand growth decoupled significantly from GDP growth for the first time in 2014
Wood Mackenzie says 2014 was a significant year for China as economic rebalancing led demand growth - for a range of major energy commodities - and GDP growth decoupled significantly for the first time. Over the past two decades, commodity demand growth had maintained relatively proportionate annual increases to GDP growth. In 2014 however the pace of power, gas, coal and diesel demand increase fell more drastically than the slight GDP moderation, beyond expectations. Wood Mackenzie expects gas demand will recover in one to two years as the key drivers of slower growth are mainly cyclical but power, coal and diesel demand will see their outlook change notably over the long-term due to major structural changes in the economy and policy. Global energy sector will need to identify which changes are structural or cyclical in to determine future demand patterns and opportunities.
China's GDP grew by 7.4% in 2014 compared to 7.7% in 2013, a modest decline. Meanwhile, compared to 2013 power demand growth fell by almost half; Gas demand growth fell by more than 8%-point; Coal demand barely grew; and Diesel demand actually contracted for the first time in more than a decade. (refer to chart). Ms Cynthia Lim, Principal Asia Economist for Wood Mackenzie says, "7.4% is still a large year-on-year GDP increase for any economy so this fall in commodity demand is counter-intuitive and we have only seen the tip of the iceberg. The Chinese government is moving away from the post-2008 investment binge and gradually moving towards a more moderate but sustainable consumption-led economic growth. There are two aspects of rebalancing: one, away from investment towards consumption, particularly in the developed coastal region; and two, a shift in economic gravity away from the coast and towards the inland region. Both trends will have significant implications on commodity demand shifts. An important indicator for the energy industry to watch will be the weakness of industry versus the strength of the consumer in China."
The research company expects Industrial recovery and related investment will remain subdued in 2015-2016 but should see robust growth through the medium-term supported by urbanisation. Key sectors such as coal and steel are weighed down by overcapacity, tighter environmental regulations and the property market slowdown. While the government has relaxed both house purchase restrictions and credit conditions through 2014, recovery in real estate will be slow as inventory levels remain high and potential buyers stay on the side line due to market uncertainty.
Wood Mackenzie analyses which sectors will be most affected in the near-term (one to two years), medium term (two to seven years) and long-term (over eight years):
Power - Sustained change due to economic rebalancing
The short-term weakness in the industrial sector will continue to subdue power demand growth, especially as high inventory levels are reduced. Mr Gavin Thompson, Principal Analyst for APAC Gas & Power research says, "Industrial output will eventually recover from overcapacity and weak demand but China's rebalancing away from industry to the service sector will have a longer-term structural impact. In tandem with the geographic rebalancing of China's economy, regional power patterns will also change with higher demand growth concentrated in the western provinces where industrialisation processes are focused, compared to coastal markets." Wood Mackenzie forecasts that power demand year-on-year in the western regions will rise at around twice the pace of coastal markets through the medium term of 2-7 years, with significant implications for capacity and fuel choices.
Coal - Remains king but impacted by structural lower power demand growth
The pace of annual coal demand growth slowed to 4-5% in 2012 and 2013 from (what the previous year), particularly in coastal markets with near-zero growth in demand for power generation. However, Mr Thompson asserts, "Coal remains king in China but growth has been severely reduced, due to industrial weakness as well as cyclical weather patterns that saw higher rainfall boost hydro output. Through the short-term, coal-fired generation will likely be muted by lower power demand, environmental policies and a rise in non-coal generation including hydro. Longer-term , coal demand pace and patterns will be impacted by structural changes, with demand rising fastest from inland provinces and the acceleration of ultra high voltage (UHV) transmission lines to export power to the coast."
Gas - demand growth will rebound but cyclical low oil prices and weather will cause near-term pain
Over the past decade gas demand in China increased by 16% a year on average between 2004-2013. Last year however, gas demand growth slowed notably from over 13% in 2013 to around 8% in 2014. Mr Thompson explains, "This was influenced more by cyclical factors. In addition to slowing GDP growth, evolving environmental policies, higher hydro output, mild winter weather in northern China and high domestic gas prices relative to oil were key factors that saw gas demand growth fall sharply. In 2015, the government's decision on domestic gas price reform will be a key influence on demand. While we expect domestic demand growth over the next few years to return to historic levels, a swift return to double-digit growth may not be achievable without lower city gate gas prices."
Oil products - weaker diesel demand outlook to stay
2014 was the fourth straight year of a decoupling relationship between China's GDP and oil demand growth as the effects of the 2009 stimulus began to fade. However, growth in oil demand has varied by oil product since then given each product's distinct drivers: Diesel demand is estimated to have contracted 0.7% in 2014 as commercial transportation demand reduced. Mr Thompson explains, "We believe we are now witnessing a structural change in China's diesel demand as the economy rebalances away from heavy industry. In contrast, gasoline demand, which reflects personal car ownership, maintained a robust growth of 8% in 2014. Healthy growth momentum for gasoline demand will likely be sustained as the economy shifts further towards consumption."
Ms Lim concludes, "The rebalancing of China's economy will play an important role in shaping the energy demand outlook for 2015 and beyond. We believe a recovery in demand for power, coal and diesel in particular is closely tied to the industrial demand outlook. While these commodities will experience a moderate recovery in the medium term as over-capacity is reduced, the on-going transition of China's economy away from an industry-led model suggests their relationship with GDP growth will weaken permanently in the longer-run. As a result, the energy sector must keep attuned to both China's underlying changes and also shorter-term developments to position it for the changing opportunities the market offers."
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions. For more information visit: www.woodmac.com
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
|
|
|
Showing 1 to 5 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Australian Coal Association
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Bhatia International Limited - India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
|
| |
| |
|
1 