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, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
|
|
|
Showing 31 to 35 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- PTC India Limited - India
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Australian Coal Association
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
|
| |
| |
|
