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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 September 13
BDI STRENGTHENS FURTHER AS CAPESIZE FREIGHT RATES JUMP - CAPT. REDDY
COALspot.com: The freight market continued its upward trend and maintaining the moment with BDI and Cape index up by 16 pct week on week. The Capesi ...
Sunday, 22 September 13
API 8 CFR SOUTH CHINA COAL SWAPS ADVANCE
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Sunday, 22 September 13
SUB-BIT INDONESIA COAL SWAPS REMAIN UNDER PRESSURE
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 2.09 percept month on month on Friday 20 September 2 ...
Friday, 20 September 13
SHIP OWNERS INVEST MORE THAN $9.2 BILLION ON NEW BUILDING VESSELS DURING AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity ...
Friday, 20 September 13
DRY BULK MARKET REACHES NEW HEIGHTS THIS WEEK STANDING AT THREE-YEAR HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The biggest rally of the dry bulk market in more than three years have brought back joy among ship owners, especially those active in the Capesize m ...
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- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- The University of Queensland
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Planning Commission, India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
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