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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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Tuesday, 30 July 13
AUSTRALIA'S NEWCASTLE SHIPPED 12.58 PERCENT LESS COAL W-O-W
COALspot.com: Newcastle port in Australia has loaded 2,945,848 tons of coal for the week ended 0700 hours 29 July 2013, Newcastle Port Corp. s ...
Monday, 29 July 13
INDONESIA'S ENERGY NEEDS COULD SPELL GOOD NEWS FOR TANKER OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite abundant energy resources, Indonesia has still failed meet its own demand, which led to a rising import of crude. According to the latest we ...
Sunday, 28 July 13
SUB-BIT INDONESIA COAL SWAP UP SLIGHTLY FOR SEPTEMBER CARGOES
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average September 2013 delivery slightly up on day and week but fell on month on ...
Saturday, 27 July 13
CEPL INDIA TO BAG 0.3 MILLION TONS OF COAL SUPPLY ORDER FROM TNPL
COALspot.com - An India based coal trader Coastal Energy Private Limited has offered the lowest price of US$ 73.00 per metric ton for calorific valu ...
Saturday, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
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- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Parliament of New Zealand
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- White Energy Company Limited
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
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