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Tuesday, 14 October 14
KING COAL UNDER ATTACK? - EVA TZIMA
 With the last quarter of the year being well underway and with no strong signs that the Dry Bulk market could be ready for a big positive reversal, everyone is thirsty for market developments that could more clearly set out the path of freights in the following months. While most of the attention on the dry bulker side is usually placed on iron ore around this time of the year, coal recently made head-lines as well, following the new policies set in place by the Chinese government in relation to its trade. As the country remains the world’s biggest producer and consumer of coal, recently announced plans to set a floor on the quality of coal consumed domestically, has brought the Asia Pacific dry bulk trade to the spotlight.
The Chinese government has during the past years tried to pursue more environmentally friendly policies and coal consumption has been one of the main issues those policies have tried to tackle. Up until recently the pledge to reduce coal usage in the Chinese energy mix, without nevertheless setting a specific limit of coal consumption, has been the only solid promise by the government to intervene in the trade of the commodity. Earlier this year though the country’s administration started considering a ban on lower-quality coal imports and despite the fact that different versions of this policy were being drafted since 2013, it was only a few weeks ago that the final regulation was set out. So what is the impact on imports and most importantly; are dry bulk rates in the Pacific due for another hit?
As China ranks second amongst those countries with the biggest coal reserves internationally, the country’s need to import coal has been inextricably linked with its continuously growing appetite for the commodity, as well as the fact that importing coal would come cheaper compared to producing it and transporting it domestically, since the main coal producing provinces are located far from the major coal consuming city centres. While S. Africa also managed to get a piece of the pie in the most recent years, Indonesia and Australia have been traditionally those countries satisfying the largest portion of Chinese imports.
The new regulations, which are set to come into effect as soon as January 1st 2015, will restrict the import and local sale of coal with ash content over 16% and sulphur content over 1%, in main Chinese population centres, while a total ban will be imposed on the sale, transportation and import of coal in cases where ash and sulphur content exceed 40% and 3% respectively.
At a first glance, with the biggest chunk of Australian coal having an ash content of more than 20%, it seems that Chinese coal imports from the Land Down Under will be the ones that could take a hit. Panamax up to Capesize range vessels are usually the ones facilitating this trade, so pressure on rates for these segments is logically expected. Whether this pressure is going to last is still questionable at this stage though. We could well see sooner rather than later coal producers in Australia invest in upgrading the quality of their production to meet the new quality standards, while even in the case that they don’t, Australian production could most probably be directed towards countries like India that has been displaying growing appetite for coal.
At the same time, as quality restrictions also apply to Chinese domestic production, the time it will take for local producers to adjust to the new standards could also be a period during which imports will have to remain strong. Since the majority of Indonesian production is meeting the recently announced quality standards, China will most probably turn to Indonesia to increase its imports. Although there is a chance that Indonesia’s own recent regulations with regards to export permits could possibly delay some of the upside created by the squeeze out of Australian exports, once these issues are streamlined, we could soon see Supramax rates that facilitate this trade enjoying some nice upside, while Ultramax rates could also benefit as this segment is expected to get a piece of that trade as well in the near future.
So even though in the short to medium term Australian exports to China might take a hit, seaborne coal trade volumes in the Pacific could soon find their balance back. Australians might improve the quality of their production and lure back demand ex China, or they could shift their imports to countries like India limiting the downside on Panamax – Cape rates. On top of that, coal exports to China from other countries, like Indonesia, might intensify, boosting earnings for Supramax/Ultramax tonnage.
Some argue that what could actually hurt Chinese growth of coal usage is the growth rate of coal intensive sectors in the country. The growth in industries like those of crude steel, cement, and pig iron, which are heavily using coal as an energy source, has slowed down and that could also put pressure on coal volumes. But in my opinion, as these sectors are bound to continue operations, despite any short or longer term growth squeeze, they will still remain dependent on coal and the fact that their profit margins might stay under pressure, will be exactly what will support the usage of coal, which still re-mains one of the cheapest options for energy out there, a knowledge well adopted across the Asia Pacific region.
Compiled by:
Intermodal Research & Valuations
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.
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Tuesday, 11 November 14
PORT OF NEWCASTLE'S OCTOBER COAL SHIPMENTS SLIPPED 7.40% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,115.7 mil ...
Monday, 10 November 14
Q4' 15 FOB INDONESIA COAL SWAP CLOSED LOWER THAN Q1' 15 CLOSING PRICE OF US$ 49.58 ON LAST FRIDAY
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week on week and day on day.
The Q1 swap has lost just US$ ...
Monday, 10 November 14
SGX'S API 4 FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 65.44 ON 7 NOV, LOST 4.08% M-O-M
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has decreased US$ 2.78 (-4.08%) month over month and US$ 1.41 (-2.11%) w ...
Monday, 10 November 14
MOZAMBIQUE SIGNED CONTRACT WITH ETA STAR OF UAE FOR OPEN CAST COAL MINE IN TETE - AIM
- ETA Star to build slurry pipeline over the 600 kilometers to Beira in Mozambique to transport coal.
- The viability studies show the presence o ...
Monday, 10 November 14
YEAR 2015 CFR SOUTH CHINA COAL SWAP SHOWS A WEAK TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 3.74 (-5.63%) month over month and US$ 2.19 (+3.37%) we ...
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- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- The University of Queensland
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
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