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.
|
|
Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
|
|
|
Showing 131 to 135 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Planning Commission, India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
|
| |
| |
|
