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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, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Friday, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
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- Indogreen Group - Indonesia
- White Energy Company Limited
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Planning Commission, India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
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