We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Saturday, 07 June 14
EVERYTHING CHANGES, AND NOTHING ABIDES - HERACLITUS
 A couple of weeks ago, and while everyone was focusing on the struggling freight market, Russia and China made history by signing a three-decade long gas deal. Gazprom, the world’s largest extractor of natural gas, in which the Russian government holds a majority stake, has agreed to provide China with up to 38 billion cubic meters of natural gas a year starting probably in 2018. This represents more than China’s total pipeline imports throughout 2013 and 1/5 of Russia’s yearly exports. The deal, which is estimated at $400 billion, is the biggest gas contract in Russia’s history and one of the biggest energy deals to ever be reached worldwide and came after a decade of negotiations between the two countries.
The “why now?” was quickly explained as Russia’s effort to retaliate US and EU policy. Amidst sanctions from the US and Europe and the threat of further economic isolation from the West, Russia’s move was seen as an effort to expedite the process of diversifying its gas export markets, as energy represents roughly one third of the country’s GDP. The truth lies somewhere in the middle. The reality is that Gazprom and China National Petroleum Corporation (CNPC) had already agreed to most of the basic terms of the deal back in September 2013, way before tensions in Ukraine mounted. Did Russia push for resolution of those points that were holding up the deal from materializing? The answer would be yes as it probably wanted to send the West a message that sanctions can’t harm its economy that much.
The “what is the significance?” touches upon a few aspects, a couple of which are fairly interesting to look at, even at this early stage of the agreement. The impact on the natural gas market is the first and most obvious one. Once the Russian pipeline becomes active the supply could reach to over 61 billion cbm a year, almost 40% of what Russia exports to the E.U. and therefore a good hedge if Europe diverts its energy sources away from Russian gas. Would China’s appetite be satisfied though?
The Chinese demand for gas is expected to keep growing. Only last year Chinese gas imports via pipe-lines increased by more than 20% and despite the fact that the country is still very much dependant on coal, it is estimated that by 2017, gas will amount for roughly 10% of the domestic energy mix. As gas satisfies around 30% of global energy needs, one can understand the vast opportunities that lie in the Chinese market, should the country reaches these levels going forward. With demand set to grow, this also means that pipeline supplies can only keep satisfying a certain portion of it, rendering LNG imports equally necessary. Therefore the real question here is not whether LNG will still be in the picture for China but at what cost.
The Chinese will pay Russia more or less the price they currently pay for gas from the Turkmenistan pipeline. The cost of importing LNG in China is estimated to be 30% more than that. With China increasing its pipeline imports there will be pressure on the price of LNG in the Asia region, which by next year is set to become the 2nd biggest gas market worldwide. With the Chinese being charged considerably less for Russian natural gas and potentially in the future Russian LNG as well, other LNG heavy importers like Japan and S. Korea will add on to the need for discounts on the LNG price in Asian countries, which are already paying more than what the rest of the world does. China’s preference to natural gas could lead to a point where future or even current LNG projects across Australia, Canada and the U.S.A, partly scheduled to serve the country’s LNG needs, won’t be as lucrative, or in some cases even economically viable, as they were before this deal. After all, the high price of LNG in the region was the reason why so many pricey investments were inked in the first place, with predictions up until recently insisting that China’s demand would continue to primarily be met by LNG.
Another interesting aspect of the deal is that it will be paid in local currencies rather than US Dollars, as Russia is trying to protect itself from possible additional sanctions that will impede monetizing of the deal. At the same time, the Chinese government, being already the biggest holder of US debt, is trying to further distance itself from the US currency that has been losing value following the FED’s pro-longed low interest rate policy. Although per se the impact on the reserve currency doesn’t appear to be great, the reality is that this point of the deal represents another hit on the greenback dominance.
As a matter of fact, for the past few years, the BRICs – Brazil, Russia, India and China - have been taking meaningful steps away from the US currency, continuously challenging its reserve currency status by “snubbing” it in their mutual trading and this is the case here as well. No, the Dollar cannot be that easily dropped, but steps like that are undeniable hits on the market’s confidence on the currency and most importantly steps that become the ground for further similar agreements of even bigger impact on the currency.
The control of energy supply has always been a powerful weapon on the hands of anyone who had access to a sizeable portion of it and a weapon responsible for big changes in the global chessboard once fired. It usually takes time for change to happen, global trade patterns to shift and geopolitics to make a big scale impact but one thing is certain; change is unavoidable and it usually comes gradually rather than in one big bang.
- Eva Tzima -
Analysts:
Mr. George Lazaridis
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 12 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
|
|
|
Showing 3711 to 3715 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
|
| |
| |
|
