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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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Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Marubeni Corporation - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
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