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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
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Monday, 06 July 20
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Monday, 06 July 20
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Thursday, 02 July 20
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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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- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Latin American Coal - Colombia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
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