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Thursday, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
 Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop of 6.5% in 1Q20 when market demand was dampened by the Covid-19 outbreak. Demand from the industrial sector, the main driver of power consumption growth, surged by 23.9% yoy in 1Q21.Consumption from the tertiary sector and agricultural users also jumped by 28.2% and 26.4%, respectively, during the quarter, Fitch Ratings says in its latest report.
Demand Exceeds Pre-Covid-19Levels
Power demand gained 14.4% in 1Q21 from 1Q19, driven by the industrial sector’s 15.3% increase and the tertiary sector’s 16.5% gain. Demand from agricultural users, which accounted for only 1.1% of total demand, surged by 31.3%in 1Q21 from 1Q19, led by the upgrade of power grids in rural areas.
Higher Contribution from Tertiary Sector
The contribution of the tertiary sector to consumption rose to 17.3% in 1Q21, from 16.7% in 1Q20. Tertiary demand was marked by the rapid consumption growth of information and technology services, which jumped by 26.5% on average in the past two years due to the fast development of big data, cloud computing and internet of things sector. Demand from the charging and battery swapping industry shot up by 92.2% on average in 2019 and 2020, the result of faster growth in the new-energy vehicle sector.
Thermal Power Underpins Generation Growth
Power generation rose by 19% yoy in 1Q21, primarily driven by thermal power’s output increase of21.1%, accounting for 73% of total power supply, which was 7pp higher than 2020. This was because of the higher output from heating power co-generation thermal units, and lower wind and solar contribution in winter.
Fuel Mix Continues to Improve
The proportion of coal-fired power capacity in China’s fuel mix decreased to 48.8% in 1Q21, after dropping to below 50% for the first time byend-2020. Fitch Ratings expects the share to drop in 2021, as China is promoting renewable energy to achieve net zero emissions by 2060. China added 23.5GW in power capacity in 1Q21, 55% of which were non-fossil fuels, including 5.33GWin solar power capacity, a 56% yoy gain, and 5.26GW in wind power capacity, a 123% jump. China also added 1.15GW in nuclear power capacity and 1.09GW in hydropower capacity in 1Q21.
Improving Coal-Fired Power Plants’ Flexibility
The report further noted that, some provinces, such as Shandong, have extended the service life of some large and efficient coal-fired power units, which also supply heat and have met environmental protection requirements This will ensure a stable power supply as renew able energy is usually affected by the intermittent nature of its source.
Utilisation Hours Improved in1Q21
Utilisation hours (UH) rose by 97 to 915 in 1Q21 from 1Q19 as power demand recovered further. Wind power UH improved by 69 hours to 619 hours, while solar power UH increased to 300 hours, up by 10 hours from1Q19. Yunnan, Sichuan and Jiangsu were the top-three provinces with the highest wind UH, while north-east and north-west China had the highest solar UH.
Thermal and nuclear power UH surged by 165 and 218, respectively, from 1Q20 due to strong consumption growth, higher connection priority for heat-power co-generation in the heating season, and lower output of hydropower, whose UH fell by 21 as a result of lower water flow.
Thermal power capacity installation rose by 10.6GW in 1Q21, including 4.77GW coal-fired power and 2.95GW gas-fired power, some of which were used for peak shaving. We expect renewable energy to continue to drive China’s power capacity installation in the rest of 2021 as the state is pushing for renewable energy to achieve carbon neutrality by 2060.Generation capex in 1Q21amounted to CNY79.5 billion, including 49.4% in wind, solar and biomass, 30.8% in hydro and 9.7% in nuclear. Capex contribution from thermal power fell to 10.1% in 1Q21, from 10.5% in 2020, under the government’s restrictions on thermal power installations given the environmental ramifications.
High Coal Prices to Squeeze Power Generating Companies’ Profit
Coal production rose 16% yoy to 970 million tonnes in 1Q21, slower than the 22% growth of coal-fired power output, resulting in higher coal prices. The Qinhuangdao 5,500 kcal/kg coal price rose 72.6% yoy to CNY 801/tonne by end April-2021. High coal prices will squeeze power generating companies’ profit and operating cash flow, which will be worsened by a lower coal-fired power tariff due to higher market trading volume.
By: Ms.Zhihua Zhang | Ms. Diana Xia
Fitch Ratings, China
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Thursday, 27 January 22
2022 - A YEAR OF REBALANCING FOR METALS AND MINING - WOOD MACKENZIE
If 2021 was the year of rebound for metals and mining (M&M) commodities, then 2022 is shaping as the year of rebalance, says Wood Mackenzie, a ...
Wednesday, 26 January 22
MARKET INSIGHT - INTERMODAL
While it is logical that most of the S&P reports of the first weeks of the year are linked to very limited activity as reflected in the weekly ...
Wednesday, 26 January 22
INDONESIA: DME PROJECT IS ECONOMICALLY VIABLE AS STUDY DEMONSTRATES
The government is encouraging downstream coal processing or increase in coal added value, for example by turning coal into Dimethyl Ether (DME) to ...
Wednesday, 26 January 22
COMMODITY PRICES COULD SOAR IF THE RUSSIA-UKRAINE CRISIS ESCALATES - ING
It appears that a number of commodity markets are starting to at least price in some geopolitical risk around the growing tension between Russia an ...
Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
Indonesia’s short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to ...
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- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
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