We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 27 December 10
ANALYSIS: CHINA'S COAL PRODUCTION MISMATCHED WITH DOMESTIC DEMAND
 As reported by iStock Analyst, China's coal market has been trapped in a strange cycle. Large coal production bases are facing overcapacity, while large coal consumption provinces are in short supply of power coal.
This structural contradiction between supply and demand in China's coal market has highlighted heated discussions recently.
Coal producers facing mounting pressure of excess in output capacity
China is facing severe excess of production capacity and oversupply of coal in 2010 due to the expansion of coal production and surging imports amid sluggish demand, and this situation is expected to carry on into 2011 as new coal companies begin operation.
Wang Zhanjun, director-general of the China Coal (TSXV:CKO) Industry Association, said that China's coal supply capacity has seen a remarkable increase in 2010 due to the operation of newly formed coal companies after mergers and acquisitions.
In the first 11 months of 2010, the country's leading coal producing provinces and regions including Shanxi, Inner Mongolia, Shaanxi, and Ningxia all saw more than 20 percent growth in coal output.
According to a report by the association, in the first 11 months of 2010 China's coal output surged 15.5 percent or 418 million metric tons (tonnes) year on year to 3.039 billion tonnes, while coal sales were up 13.5 percent or 390 million tonnes to 2.892 billion tonnes. Coal deliveries increased by 15.3 percent year on year to 1.827 billion tonnes during the same period.
The investment in fixed assets in the coal industry has continued to increase this year. In the first 11 months of 2010, fixed assets investment in coal mining and washing saw 22.7 percent year-on-year growth to 320.7 billion yuan.
Meanwhile, China's coal imports keep rising while exports keep declining. In January-November, China's coal exports dropped 13.5 percent to 17.58 million tonnes, and are expected to remain low in December. Total coal exports are estimated at 19 million tonnes for the whole year.
In sharp contrast to declining exports, coal imports maintained fast growth in 2010. Net imports of coal are expected to reach 145 million tonnes in 2010.
However, China's coal demand has remained sluggish this year. Affected by the measures for energy conservation and emissions reduction, electricity consumption growth of high energy-consuming industries like ferrous metals, chemicals, non-ferrous metals, and building materials has fallen back quickly since May of 2010, which in turn has cut coal consumption severely.
Coal consumption in the steel industry moved from positive growth to negative growth in 2010.
According to official statistics, China's daily crude steel output saw fast growth in the first half of 2010 but registered three months of negative growth in the third quarter, and only increased 4.8 percent in November.
Also, coal consumption in the chemicals industry has also remained sluggish this year. According to preliminary forecasts, coal consumption in the chemicals industry in 2010 will stay at the same level as in 2009, at 140 million tonnes.
The China Electricity Council predicted that electricity demand in China would not increase much in 2010 and 2011, estimating the growth at 10 percent in 2010, 14 percentage points lower than in 2009.
Therefore, coal industry is expected to face mounting oversupply pressure in 2011 since the output of majority coal enterprises would double. Meanwhile, large numbers of coalmines in Shanxi, Henan, Shaanxi, and Inner Mongolia are scheduled to begin operation in 2011, and the coal oversupply will be aggravated by the participation of more downstream firms in power generation and metallurgy, said Wang Zhanjun, head of the China Coal Industry Association.
Wang predicted that coal supply in China would increase 300 million tonnes in 2011, and China would face excess in supply of coal.
Short supply of coal at power plants
In sharp contrast with the excessive output and supply of coal, a number of power plants in parts of China are suffering from shortages of power coal.
In Guizhou province, coal output capacity is significantly less than demand. The local coal output is expected to increase by 160 million tonnes at most in 2011, which would exacerbate the tight supply. This is because the output capacity of newly formed coalmines is inadequate to make up for eliminated production capacity, and the newly formed capacity will not come into operation until the second half of 2011.
At the same time, power plants in Guizhou cannot afford coal produced outside the province because of higher coal prices.
Similar short supply of coal has also occurred in Hubei province. Coal stocks at power plants in Hubei have remained at critical level since the beginning of this year, and sometimes were even not enough for one week's consumption.
The power coal shortage is not only a headache for power plants in non-coal production areas, but also hit power plants in major coal production areas like Shanxi and Henan.
Take the Datang Taiyuan Second Thermal Power Plant for example. The plant has suffered coal shortages four times since the beginning of 2010 because its contracted coal supplier supplied only 400,000 tonnes of coal towards meeting the 1.5-million-tonne coal contract.
As of December 4, power coal stocks of Henan have slid sharply from 3.84 million tonnes at the beginning of November to 2.65 million tonnes, far below the critical level of 3.5 million tonnes.
This has led to a daily supply shortage of 700,000 tonnes. Current coal production system might be primary cause
The short supply of power coal against excess of overall output capacity in China is believed to be caused mainly by system contradictions existing in the coal industry.
Actually, China's coal industry has trapped in a strange circle. Coal demand weakens after power plants stockpile power coal, but after the stockpiling, coal stocks of coal producers are down. Therefore, the coalmines produce more coal, which eventually leads to excess of output and excessive supply of coal.
Some coal suppliers have complained that if they carry on supplying coal according to their coal contracts with the power plants at the contracted price, the coalmines would all suffer (OOTC:WLVTQ) losses while the power plants all make profits.
A senior manager of the Shenhua Group said that it is difficult to avoid the structural contradictions of disjointed coal output and demand under the current government-capped management system. The outlook of China's coal industry remains troubled for 2011, and the problem of excessive output capacity would continue to be widespread in China, especially in western areas.
According to the manager, branches of the Shenhua Group in Xinjiang are all in the red due to heavy coal inventory pressure, while some provinces in east and south China are suffering from severe shortages of coal.
An insider with the Shanxi Coking Coal Group said that the group was ambitiously planning to double its output capacity during the period of the 12th Five Year Plan (2011-15), but the current market environment is very unfavorable for the coal industry. The cost of acquiring small coalmines has spiraled far beyond expectations.
Therefore, the mismatch between coal supply and demand at the turn of the new year is manageable, and the market is expected to see increasing supply and decreasing demand soon, noted the insider.
But Wang Xianzheng expressed disagreement. He believed that China's coal demand would increase by 200 million to 300 million tonnes in 2011. Besides which, the government-planned construction of 10 million units of affordable housing would drive coal demand by 60 million tonnes at least. Wang believed that the coal price would remain buoyant in 2011 but would not rise much.
Source: Quotemedia, Xinhua News Agency (Edited by Li Xiaohui), istockanalyst
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
|
|
|
Showing 96 to 100 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
|
| |
| |
|
