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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, 20 September 13
US COAL PRODUCTION SLIGHTLY UP WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer produced totalled approximately 20.30 million short tons (mmst) of ...
Friday, 20 September 13
COLOMBIA SHIPPED 31.14 MILLION TONS OF THERMAL COAL IN H1
COALspot.com : Colombia’s coal exports fell by 20.59 percent in June 2013 compared to Colombia’s May's export of 7,633,579 MT.
Colom ...
Thursday, 19 September 13
CAPESIZE : AVERAGE DAILY EARNINGS HAVE GAINED ALMOST USD 6K WOW - FEARNLEYS
Handy
The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept carg ...
Wednesday, 18 September 13
IRON ORE AND ZINC ARE BEST PERFORMING MINING SECTORS IN CURRENT LOW PRICE, HIGH COST ENVIRONMENT - WOOD MACKENZIE
With the fall in commodity prices, cash margins in the mining industry have come under pressure. Accordingly, producers and investors are placing in ...
Wednesday, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
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- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- The University of Queensland
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Australian Coal Association
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Central Electricity Authority - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
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