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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, 18 October 13
WOOD MACKENZIE FORECASTS CHINA WILL OUTWEIGH THE REST OF THE WORLD FOR BASE METALS DEMAND BY 2017
China set to account for 52% of 117mt base metals market by 2017
China is on track to exceed rest of the World demand by 2017, becoming the singl ...
Friday, 18 October 13
DRY BULK MARKET ON "PAUSE" MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been on "pause" mode over the past week, after China's return from the week long holidays. The industry's benchm ...
Friday, 18 October 13
US PRODUCED 6.7% MORE COAL W-W
COALspot.com – United States the world’s second largest coal producer produced approximately 18.9 million short tons (mmst) of coal in a ...
Thursday, 17 October 13
CAPESIZE: RATES ARE AGAIN MOVING UPWARDS - FEARNRESEARCH
Handy
Activities were obviously slowed down in the Pacific basin. There were only few coal movements which fixed around USD 15-16k for ships in Sin ...
Thursday, 17 October 13
SGX TO LAUNCH "SGX THERMAL COAL FUTURES" NEXT MONDAY
COALspot.com: SGX is to launch two thermal coal futures contracts, SGX API 8 CFR China Coal Index Futures and SGX IHS McCloskey Indonesian Sub-bit F ...
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- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- The University of Queensland
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
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