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Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
 China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in the first quarter of 2020, down 6.8%year-on-year. The power sector’s coal consumption fell 6.8%year-on-yearto 507mt,while construction sector usage fell 24.7% year-on-year to 65mt. Although the coal market remains volatile, industry observers estimate an average decline of 8% to 12% year-on-year in China’s coal demand. IEEFA currently estimates a 10% year-on-year fall in China’s 2020 coal imports, based on the following four key variables:
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Coal imports: From January to April2020,imports rose 27%year-on-year, but we note this is a function of lower prices.
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Domestic coal production: After declining year-on-year in January and February, output in March and April rose 6.4%and 6.0%year-on-year, respectively.
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Power generation: Thermal power generation declined 8.2%year-on-yearin the first quarter but rose 1.5%year-on-yearin April.
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Steel output: This increased 1.3%year-on-yearfor the first four months of 2020.
A detailed examination of China’s data, together with press commentary on the Chinese Government’s policy on coal imports, reinforces our view that caution is merited. According to media reports, China’s coal imports grew 22% year-on-year in April, and January to April 2020 imports increased 27% year-on-year, but the growth was boosted by lower prices for coal imports from Indonesia and Australia. The average April Newcastle benchmark price of US$56.2/tonne is 35% lower year-on-year.
According to media reports, China’s coal production experienced year-on-year growth of 6.4% in March and 6.0% in April. This growth is unsurprising as the National Energy Administration announced that China’s production had reached 83.4% of total coal mining capacity as of 3 March. The COVID-19-related disruption to China’s domestic coal output appears limited to January–February2020,when output declined 4.8%year-on-year, which is bad news for coal exporters to China. Additionally, 12 Chinese coal companies have called for a 10% cut in output from current levels to support domestic prices. The year-on-year growth in China’s domestic coal production would also tie in with government policy to impose an import quota this year that is set at 2017 levels, which are 10% below 2019 levels.
From January to April 2020, total Chinese power output fell 4.7% year-on-year, while thermal power output fell 5.9% year-on-year. In April, total power output grew 2.0% year-on-year, and thermal power output was up 1.5% year-on-year. From January to April 2020, 87 % of China’s thermal power capacity was from coal-fired plants, with the remainder from gas-fired facilities, according to the China Electricity Council. We note that even with the slight uptick in thermal power output for April, it is too early to suggest a sustained recovery in coal usage and imports.
China’s steel output serves as an indicator of economic activity. It rose1.3%year-on-yearfor January to April2020, indicating some stability. According to Mysteel Global, blast furnace capacity utilization rates at 163 mills rose to 85.6%, the highest rate in nearly 11 months, as of 15 May. However, against the backdrop of an increase in domestic coal production, this level of economic activity would still present downside risks for Chinese coal imports.
The outlook on government policy remains negative for exports to China, thanks to the coal import quota that seeks to maintain 2020 coal imports at the 2017 level of 270mt compared with 300mt in 2019. However, according to media reports, Guangdong and Fujian provinces used up the quota in the first four months of 2020. One positive sign for Indonesia’s exporters is the suggestion in media reports that China may reduce coal imports from Australia from July because of political tensions. Meanwhile, China’s coal producers have also been calling for government help. The China Coal Transportation and Distribution Association (the state-run representative body for domestic miners) has asked the National Development and Reform Commission to help restrict imports of cheap fuel. Additionally, 12Chinese coal producers have called for a 10% reduction in domestic coal output. Industry observers have estimated a year-on-year decline of 8–12%for China coal imports. This is in line with IEEFA’s conclusion that Chinese coal imports could decline 10%year-on-yearin 2020.
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org
About the Author Ghee Peh
Financial Analyst
Ghee Peh has worked in investment research since 1995, including at Jefferies, BNP Paribas, and UBS. He has covered Asian coal, cement and metal companies.
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Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
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Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
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Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
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- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- MS Steel International - UAE
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
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