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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.
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.
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Wednesday, 15 October 14
SHIPOWNER NOT LIABLE FOR CARGO DAMAGE RESULTING FROM POOR STOWAGE - CLYDE & CO
KNOWLEDGE TO ELEVATE
Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery o ...
Wednesday, 15 October 14
NEWCASTLE SHIPPED 13.96 MILLION TONS OF COAL IN SEPTEMBER; UP 5.72%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,227.7 wor ...
Tuesday, 14 October 14
THE NEW CHINESE TRANSPORTATION TAX LAW: WHAT DOES IT MEAN FOR GREEK SHIPPING? - DELOITTE
China has recently promulgated a new law which imposes tax on profits from freights of inbound routes. The objective of the new tax law titled &ldq ...
Monday, 13 October 14
CHINESE COAL IMPORT TARIFFS YET ANOTHER BLOW TO AUSTRALIAN COAL EXPORTS - TIM BUCKLEY
COALspot.com: China’s unexpected move to reintroduce thermal coal import tariffs of 6% will have a materially negative impact on the viabilit ...
Monday, 13 October 14
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 54.92, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for delivery Q4' 2014 decreased US$ 0.80 (-1.46%) month over month and US$ 0.52 (-0.95%) week over ...
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- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Parliament of New Zealand
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
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