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Thursday, 16 April 15
NEW COMMODITY SUPERHIGHWAY WILL EMERGE IN CHINA, ALTERING ENERGY TRADE FLOWS - WOOD MACKENZIE
 Wood Mackenzie says that China’s Go West strategy – encouraging coastal to inland flow of capital and people - will result in the formation of a new commodity superhighway. This new superhighway will impact the energy trade flows within China and externally via the new Silk Road routes; which acts to link the country's east to west, onwards to Central Asia and beyond. This represents significant business and investment opportunities in China's west.
Wood Mackenzie’s Principal Asia Economist, Ms Cynthia Lim, explains China’s Go West policy, “The plan is already underway and is often touted as China’s silver bullet to ensure long-term GDP growth as the economically dominant coastal region approaches maturity. The coastal provinces will have to upgrade their industries to higher value-add sectors, such as services while industries will relocate inland westwards. This is shifting the regional distribution of demand centres and power generation; and the impact will become more apparent in the next two decades. This will form an impressive commodity superhighway.”
The commodity superhighway will have three main implications: "The first implication," says Mr Frank Yu, Senior Asia Power Consultant, “Is that power generation in the central and western regions will almost triple from around 3,200 Terrawatt hours (TWh) in 2015 to almost 9,600TWh in 2035. This far outpaces the coastal region’s generation growth in the same period, which is only set to increase from under 3,000TWh to 6,000TWh.”
The second implication is the emergence of new energy trade flows within China, from the inland west to coastal regions of China. Mr Yu explains, “Coastal regions will become further reliant on China’s west to meet its energy demand. The west has an abundant supply of energy, accounting for more than 65% of China’s marketable coal and gas reserves. As coal remains the dominant fuel, coal-fired power plants in central and western province areas will generate more power to feed demand-heavy coastal centres through long-distance power transmission grids. Additionally, the coastal region’s generation growth in the same period, which is only set to increase from under 3,000TWh to 6,000TWh.”
The second implication is the emergence of new energy trade flows within China, from the inland west to coastal regions of China. Mr Yu explains, “Coastal regions will become further reliant on China’s west to meet its energy demand. The west has an abundant supply of energy, accounting for more than 65% of China’s marketable coal and gas reserves. As coal remains the dominant fuel, coal-fired power plants in central and western province areas will generate more power to feed demand-heavy coastal centres through long-distance power transmission grids. Additionally, the west holds the majority of renewable energy potential – hydropower, wind and solar. We also expect shale gas production in the west to ramp up, particularly from Sichuan, Shaanxi and Xinjiang, to around 140 billion cubic metres (bcm) by 2035. ”
Wood Mackenzie says the third implication is that planned transport infrastructure build will open up new markets in Central Asia and facilitate energy imports into China via its western border. China is planning two main routes – the new land-borne ‘Silk Road Economic Belt’ and the ‘21st Century Maritime Silk Road’, from southeast China to west Asia, via the South China sea. Infrastructure development will make Xinjiang a key gateway for commodity trade between China, Central Asia and Russia. Ms Lim says, “Xinjiang is strategically important because of its rich energy resources and as a transport hub with oil and gas supplies from Central Asia and Russia converging before being distributed for use in the east.
“For China’s west to fulfil its growth potential, significant investment is needed in energy production and transport infrastructure. We estimate that investment in new power generation capacity and coal mines in Xinjiang, for example, will total US$140billion (bn) and US$120bn respectively in the next 20 years. However, there are also key risks to the success of this commodity superhighway that investors will have to watch for.”
Wood Mackenzie's analysis says the risks are: Firstly, the pace and scale of economic and energy reforms - slow progress in restructuring provincial government debt and introducing market pricing for gas and power could subdue western development. Secondly, the rate of building infrastructure for power transmission as this is key for the success of trade routes with coastal China and Central Asia. Thirdly, water scarcity as it could mean coal mining and power plants that already face cost pressure from extra raw material preparation requirements like coal washing could face higher costs. Lastly, political risks must be managed – this includes diplomatic relationships with China’s Central Asian neighbours in building the new trade routes as well as potential domestic unrest in Xinjiang.
Ms Lim concludes, “Many of the risks can be mitigated through government support and finance but the geopolitical and social risks are far less predictable. China’s west has the energy resources, cost advantages and policy support to become a new energy and commodity superhighway, re-defining the flow of trade for decades to come. It could drive robust GDP growth for China through the longer-term and strengthen China’s economic and political influence with its neighbours. Given the high stakes of this commodity superhighway, success of the Go West strategy is a major Chinese government priority.”
About Wood Mackenzie:
Wood Mackenzie is a global leader in commercial intelligence for the energy, chemicals, metals and mining industries, providing objective analysis and advice on assets, companies, and markets to leading international and national energy and metals companies as well as financial institutions and governments.
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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 ...
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- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- PTC India Limited - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Planning Commission, India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- VISA Power Limited - India
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