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Wednesday, 04 March 20
CORONAVIRUS: A WILDCARD FOR BULKS DEMAND - WOOD MACKENZIE
 The coronavirus is casting a shadow across commodity markets. It has undermined China’s economic sentiment, putting the country’s growth outlook at risk. The full scale and impact of the outbreak remain to be seen, but it is certainly an unwelcome new wildcard for bulks demand. So, what is the potential impact on steel, iron ore, metallurgical and thermal coal?
This article includes key points from the insight ‘Coronavirus: assessing the impacts on bulks’. Fill in the form on this page for a complimentary copy of the full insight.
What is already clear is that the coronavirus outbreak threatens an otherwise positive near-term outlook. A solid end to the year meant China’s economy secured annual growth of 6.1% in 2019. Metals demand was also showing signs of improvement – mainly on the back of accelerated Industrial Production (IP) and Purchasing Managers Index (PMI) indicators in November and December, an uptick of auto production in December, and a recovery in property completions across Q4.
China’s Phase One trade deal with the US also fuelled expectations that its macroeconomy would remain robust in H1 2020. The coronavirus outbreak has put this outlook at risk.
Steel demand will be affected
Consumer activity in China has been hit by the extended holiday period, transport bans and quarantines. The restrictions on the workforce have also delayed the restart of some construction projects – and as construction accounts for two-thirds of Chinese steel demand the implications are stark. Crude steel and hot metal demand – previously set to grow this year – are now facing a year-on-year decline.
China has felt the impact of a virus outbreak before. In 2003, SARS slowed construction activities, delayed the springtime peak for steel demand and put pressure on rebar prices.
But what can we really learn from the experience of the SARS epidemic? And how could steel be affected this time around? Fill in the form to read the full complimentary insight.
How is the coronavirus outbreak affecting bulks?
Metallurgical coal
The direct impact on metallurgical coal imports has been relatively muted. Production at coastal mills is strong and we don’t expect the outbreak to drive a significant change in import trends – the high availability of stocks from the customs clearance delays in 2019 currently has a bigger influence.
In the very near term, the extended holiday period has meant that the impact on domestic metallurgical coal supply is greater than the impact on demand. Resultant coal shortages are pushing prices higher.
However, an inevitable decline in steel demand will affect steel prices and margins. Lower steel margins will ultimately impact on metallurgical coal markets. We expect metallurgical coal demand between March and May to be lower than it would have been as a result.
Iron ore
We expect a relatively low impact on iron ore demand. Chinese blast furnace (BF) and basic oxygen furnace (BOF) steel production should remain resilient, with most large integrated operations continuing to operate, if at a reduced rate. Iron ore prices have taken a hit, driven by uncertainty and a lack of volume during the holiday period.
Read the full insight for more on our price forecast, and how slower end-use demand from construction could affect producers.
Thermal coal
Thermal coal demand and domestic production will both be dented by weakening economic and industrial activity. Domestic supply is returning quickly, but demand is slower to recover – potentially leading to an oversupply situation in March. As the largest supplier of coal to China, Indonesia has the most to lose if the situation worsens.
The effect on international prices is likely to be volatile in the very short-term as the outbreak remains an emerging news story. Throughout the year though, the downside risk for prices is muted, given how significantly they fell in 2019 and that many producers are already in a negative margin situation. Market sentiment could certainly drive the price lower, but this would likely be a temporary drop until China’s imports picked up again towards the end of the year.
Source: Wood Mackenzie
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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Australian Coal Association
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
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