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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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Sunday, 19 October 14
LOW DEMAND PUSHES DOWN COAL FREIGHT RATES; VOLATILITY CONTINUES
COALspot.com: This week all the segments softened including BDI except for Panamax index.
The BDI was down by1.70 pct and clsoed at 944 points ...
Friday, 17 October 14
INTERNATIONAL COAL PRICES ARE AT LOWEST LEVEL; COAL STOCKS AT INDIAN POWER PLANTS ARE ALSO AT LOWEST LEVEL
International coal prices as well as coal freights are falling and reaching to its lowest levels. According to PTI, fuel stockpiles at the thermal ...
Friday, 17 October 14
U.S. COAL PRODUCTION UP BY 3.6% WEEK - ON - WEEK
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.20 million short tons (mmst) of coal in ...
Friday, 17 October 14
DRY BULK SHIPPING'S OUTLOOK NOW SHIFTING TO A LESS PROMISING ONE, SHIP PRICES EXPECTED TO FOLLOW SOON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
China’s and other Asian countries’ return to the dry bulk market last week, didn’t trigger the hoped support towards the dry bulk ...
Thursday, 16 October 14
KOREA MIDLAND POWER TO BUY 490K MT OF LCV COAL FOR 1Q 2015
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 490,000 Metric Tons (MT) of LCV (Sub) Bitumino ...
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- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Planning Commission, India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- The University of Queensland
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
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