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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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Wednesday, 29 October 14
GOOD REASON WHY Q4 CAPESIZE OUTLOOK WAS SO BULLISH AT START OF THE YEAR - COMMODORE RESEARCH
COALspot.com: There was good reason why so many analysts' capesize outlook for Q4 was so very strong at the start of this year. Brazilian ...
Tuesday, 28 October 14
SGX'S FOB RICHARDS BAY COAL SWAP FOR DELIVERY Q1' 2015 CLOSED AT $ 68.07 ON 24 OCT
COALspot.com: API 4 FOB Richards Bay coal swap for Q4’ 2014 delivery decreased US$ 0.65 (-0.96%) month over month and increased US$ 1.79 (+2. ...
Tuesday, 28 October 14
SUB-BIT FOB INDONESIA COAL SWAP FOR Q1' 15 DELIVERY CLOSED 3.68% LOWER MONTH ON MONTH
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week.
The swap has lost US ...
Monday, 27 October 14
GOVT PROMISES TO EASE LICENSING PROCEDURES IN MINING SECTOR - THE JAKARTA POST
The Energy and Mineral Resources Ministry’s directorate general for mineral and coal plans to simplify the complicated licensing procedures i ...
Monday, 27 October 14
FOB NEWCASTLE COAL SWAP FOR Q1' 15 DELIVERY CLOSED $ 0.10 LESSER THAN Q4' 14 CLOSING OF $ 53.27 PMT
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.43 (-2.61%) month over month and increased US$ 0.05 (+0.09% ...
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- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Australian Coal Association
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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