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Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
 Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says that import demand will still meet previous high expectations, although overall demand growth will be lower. This is due to lower seaborne coal prices compared to domestic coal prices in coastal China. As such, domestic producers are competing for market share by lowering prices in spite of negative margins. This explains the recent continuous drop in Chinese coal prices. However, Wood Mackenzie says that coastal China coal prices will be supported at *RMB500 per tonne (t) as at this price level 40% of domestic supply operates at negative margins.
China's gross domestic product (GDP) growth has slowed from 9.3% to 7.5% from 2011 to 2013. As a result, power demand growth has slowed in China and coal demand in coastal provinces has remained flat, staying at 2011 levels of 1.2 billion tonnes(Bt). In contrast, seaborne demand increased rapidly - This year, Wood Mackenzie expects China to import 235Mt of thermal and 67Mt of metallurgical coal, up from 168Mt and 31Mt respectively in 2011. This translates to a growth in share of seaborne imports into coastal China from 17% to about 25% between 2011 to 2013.
Wood Mackenzie's Senior Analyst Coal Market Research, Mr. Prakash Sharma says, "The trend of increased coal imports has been aided by weak coal prices in the international market. This means that Chinese coal import demand is almost entirely driven by the competitiveness of imported versus domestic supply. As such, large Chinese miners are adopting volume strategy by producing more to bring down operating costs and pricing lower to maintain market share."
These measures will hold market share in the short-term but may be counter-effective if prices fall too low in coastal China. Therefore we believe prices find a floor at RMB500/t. Small to medium sized domestic players will be most affected due to relatively high fixed labour costs and mine safety expenses in China. Large producers such as Shenhua and China Coal, who have resorted to aggressive pricing, contribute almost 50% of China's domestic coal production. The remainder 50% comes from the small to medium size miners.
Rohan Kendall, Senior Analyst for Coal Supply Research, says, "At RMB 500/t, we estimate that 40% of China's thermal coal production will produce at negative margins. Small to medium sized producers operating at negative margins, particularly those producing low-energy coal, face a real risk of mine closures. The situation may also trigger further consolidation of small loss-making mines in China."
Summarizing, Mr Sharma says, "The 40% of domestic production producing at negative margins equates to about 150% of the size of the current seaborne market. Full replacement volumes cannot feasibly be sourced from imports without creating a price response that will actually incentivise domestic miners to remain in production. Therefore, we believe prices will be supported above RMB 500/t, turning the tide on the current price trend."
*All prices refer to benchmark FOB Qinghuangdao Thermal coal price (5500 kcal/kg NAR basis) inclusive of 17% VAT.
Editor's notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world's energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
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Thursday, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
Monday, 23 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 3 PERCENT LESS COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 3 per cent week on week to 2.92 million mt for t ...
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Showing 4101 to 4105 news of total 6871 |
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- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Xindia Steels Limited - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- The University of Queensland
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