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Tuesday, 15 October 13
CHINA COAL IMPORTS TO KEEP GROWING IN THE YEARS TO COME, ALBEIT AT A SLOWER RATE - EVA TZIMA / NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest monthly report, shipbroker Intermodal highlighted the growing role of coal in the energy mix. According to Intermodal's research analyst, Eva Tzima, "since the beginning of 2013, there has been a lot of debate as for what the future might hold for the trade of coal. The majority of coal production is used to fuel coal-fired power plants in the form also known as thermal coal. Coal, which is today the source that feeds almost 40% of global electricity requirements, has been the fastest growing energy source since the beginning of the 21st century, ac-cording to the International Energy Agency. It’s been mainly on the back of developing economies, like those of China and India that the traded volume of the commodity has witnessed a rapid increase. With China being globally the biggest producer and consumer of thermal coal, the demand for the latter has been inextricably linked with that of economic growth in the world’s second largest econo-my. As the rate of Chinese economic growth has been slowing down, so has the rate of coal consumption, while at the same time, due to its non green nature, the popularity of coal as an energy source has been gathering less and less supporters worldwide", she noted.
Tzima added that "despite the fact that China has been sitting on trillions of tonnes of reserves and therefore local appetite for coal has been historically satisfied onshore, as of the end of 2008 the country’s coal imports have started to increase at a very fast pace. The big beneficiary of this trend was no other than the dry bulkers, as the majority of those imports is realized by seaborne trade. Last year alone the an-nual increase of imported amounts of coal into China touched al-most 60% compared to those of 2011. As we head into the final quarter of 2013 it seems that an even higher figure of imports will be printed, proving that the trend is still strong. A little less than one third of Chinese coal imports is currently being satisfied by Indonesian reserves, while other Pacific region countries like Australia and Vietnam also account for substantial portions".
According to Intermodal's analyst, "the question that naturally comes to mind is why turning to offshore supplies for coal when the commodity is plentiful right there in your court? The answer is simple; Price. The cost of producing and transporting coal domestically has been higher than importing it. But as the country’s imports have continued to rise and its economy has gone into a slower gear, Chinese stockpiles have also increased significantly, fact which in its turn has put significant pressure on local prices. Since January alone, coal prices in China have softened more than 15%. As local prices have been softening a lot of reports have surfaced warning about possible pressure on coal imports going forward. On top of that, the Chinese government, in its effort to pursue more environmental friendly policies, could also weigh down on the future quantity of coal cargoes imported. The energy targets initially set forth by the government, as part of its overall pollution control plan, included both a ceiling on the imported volume and use, as well as a floor on the quality of coal consumed in the coun-try, adding further to the negative sentiment around coal usage altogether", Tzima noted.
"So, will the trade of coal start burning low in the Pacific region? I would think that most probably not. On the one hand the infrastructure modernization needed, should the government keep pushing for lower emissions of CO2, will add on to the cost of Chinese pro-duction. This will be reflected on the price of locally produced coal, restricting the gap between domestic and international prices to narrow down to a point where imports would no longer make economic sense. On top of that, while local coal prices have been softening, the same has happened to coal prices globally and even at a higher degree, so the price incentive for Chinese demand to dis-tant itself from imports doesn’t appear to be there. At the same time what originally started as a very solid plan to cap imported quantities has slowly been revised to a less strict policy, which doesn’t seem as hurtful for imports as it was in its initial form. This revision shows that cheaper energy sources are likely to hold centre stage, as it seems quite possible that the Chinese government would chose to partly sacrifice its “Green” targets for its “Growth” targets. In fact while it has pledged to reduce the country’s coal usage to 65% of its total energy mix, a 2% reduction from what it is today, it hasn’t set a specific amount of coal consumption. This means that under the current plan, the Chinese will still allow for growth in coal consumption should the country’s energy needs continue to rise. But will they do? In my view the fact that the Chinese government has compromised with slower economic growth targets for a longer period of time, in order to ensure the sustainability of that growth, in itself is supportive of firm on-going energy consumption within the country. Following the path of slower but more sustainable growth, energy consumption should be maintained at its current growth levels rather than exhaust itself in the medium term follow-ing strong but short-lived periods of overconsumption.
So despite the fact that King Coal might be facing some opposition, it seems that the Chinese will continue to be supportive of both imports and consumption of the commodity. And unless dramatic action is taken by their government, imports should keep increasing in the next years. This will almost certainly be an increase at a slower rate, but an increase nevertheless, as cheaper options of the commodity will be still made available through seaborne trade in the Asia-Pacific region, allowing for coal to keep burning hotter for a longer period than what some might chose to think...", Tzima concluded
Research Analyst - Eva Tzima
Source: Nikos Roussanoglou, Hellenic Shipping News
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Sunday, 22 December 13
QUIET FREIGHT MARKET DUE TO LONG HOLIDAYS
COALspot.com: The market was soft this week with all indices down. However towards second half of the week the futures on segments was firming up.
...
Friday, 20 December 13
US PRODUCED 2.71% MORE COAL WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal in ...
Friday, 20 December 13
DRY BULK MARKET SLUMPS AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As has been the case in recent years, the dry bulk market has been on a downward trend ahead of the Holiday Season for a large part of the world. Th ...
Thursday, 19 December 13
SHIPPING CONFIDENCE HITS THREE-YEAR HIGH - MOORE STEPHENS
Overall confidence levels in the shipping industry rose to their highest level for more than three years over the three-month period to November 201 ...
Wednesday, 18 December 13
SNP ACTIVITY IN CHINA SEEMS TO BE SLOWING DOWN - CHRISTOS TRAGEAS
Approaching the end of the year, SnP activity in China seems to be slowing down in comparison to the first half of this quarter, as most Chinese Shi ...
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- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
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