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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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Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
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- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Planning Commission, India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
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