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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, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
Tuesday, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
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- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- White Energy Company Limited
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Australian Coal Association
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- VISA Power Limited - India
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Planning Commission, India
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
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