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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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Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
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- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- White Energy Company Limited
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
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