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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
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Posco Energy - South Korea
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
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