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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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Friday, 25 October 13
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED TOTALLED 803.1 MMST
COALspot.com – United States the world’s second largest coal producer produced approximately 19.10 million short tons (mmst) of coal in ...
Thursday, 24 October 13
PANAMAX: RATES SLIP ACROSS BOTH HEMISPHERES
Handy
We were back from holidays but still not much enquiries in the market. Overall future direction is uncertain. Currently, ships passing Singap ...
Thursday, 24 October 13
SHIP PRICES ARE INCREASING ON THE BACK OF IMPROVED MARKET SENTIMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on retreating from its recent highs, ending yesterday at 1,786 points, down 61 points on the day, with Capesizes leadin ...
Wednesday, 23 October 13
DRY BULK MARKET HAS SHOWN SIGNS OF STABILITY - INTERMODAL
Chartering (Wet: Stable+ / Dry: Stable-)
The Dry Bulk market has shown signs of stability this past week, with the sole exception of Capes, rates f ...
Wednesday, 23 October 13
MARKET SENTIMENT IN THE DRY BULK SECTOR REMAINS POSITIVE - YANNIS OLZIERSKY
Market sentiment in the dry bulk sector remains positive despite the latest correction in freight rates for the Capesize sector, which are sliding f ...
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- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Deloitte Consulting - India
- The University of Queensland
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- ASAPP Information Group - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
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