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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, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- The University of Queensland
- Planning Commission, India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
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