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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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Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
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- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Mercator Lines Limited - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
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