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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, 04 November 14
INDONESIAN COAL SWAPS FOR 2015 DELIVERIES SHOW A WEAK TREND
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week, the trend was same as las ...
Tuesday, 04 November 14
FOB NEWCASTLE COAL SWAPS GAINED WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.09 (-1.99%) month over month and increased US$ 0.31 (+0.58% ...
Monday, 03 November 14
ADARO PRODUCED 41.90MT OF COAL FOR FIRST 9 MONTHS OF 2014
COALspot.com: Adaro’s coal production in the third quarter reached 14.03 Mt, a 2% increase compared to the same period of last year. Accordin ...
Monday, 03 November 14
CFR SOUTH CHINA COAL SWAP FOR Q4' 2014 DELIVERY LOST 2.80% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery has decreased US$ 1.86 (-2.80%) month over month and increased US$ 0.37 ( ...
Monday, 03 November 14
INDONESIAN'S COAL EXPORTS JUMP IN SEPTEMBER
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
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- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
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