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