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