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Thursday, 16 April 15
NEW COMMODITY SUPERHIGHWAY WILL EMERGE IN CHINA, ALTERING ENERGY TRADE FLOWS - WOOD MACKENZIE
 Wood Mackenzie says that China’s Go West strategy – encouraging coastal to inland flow of capital and people - will result in the formation of a new commodity superhighway. This new superhighway will impact the energy trade flows within China and externally via the new Silk Road routes; which acts to link the country's east to west, onwards to Central Asia and beyond. This represents significant business and investment opportunities in China's west.
Wood Mackenzie’s Principal Asia Economist, Ms Cynthia Lim, explains China’s Go West policy, “The plan is already underway and is often touted as China’s silver bullet to ensure long-term GDP growth as the economically dominant coastal region approaches maturity. The coastal provinces will have to upgrade their industries to higher value-add sectors, such as services while industries will relocate inland westwards. This is shifting the regional distribution of demand centres and power generation; and the impact will become more apparent in the next two decades. This will form an impressive commodity superhighway.”
The commodity superhighway will have three main implications: "The first implication," says Mr Frank Yu, Senior Asia Power Consultant, “Is that power generation in the central and western regions will almost triple from around 3,200 Terrawatt hours (TWh) in 2015 to almost 9,600TWh in 2035. This far outpaces the coastal region’s generation growth in the same period, which is only set to increase from under 3,000TWh to 6,000TWh.”
The second implication is the emergence of new energy trade flows within China, from the inland west to coastal regions of China. Mr Yu explains, “Coastal regions will become further reliant on China’s west to meet its energy demand. The west has an abundant supply of energy, accounting for more than 65% of China’s marketable coal and gas reserves. As coal remains the dominant fuel, coal-fired power plants in central and western province areas will generate more power to feed demand-heavy coastal centres through long-distance power transmission grids. Additionally, the coastal region’s generation growth in the same period, which is only set to increase from under 3,000TWh to 6,000TWh.”
The second implication is the emergence of new energy trade flows within China, from the inland west to coastal regions of China. Mr Yu explains, “Coastal regions will become further reliant on China’s west to meet its energy demand. The west has an abundant supply of energy, accounting for more than 65% of China’s marketable coal and gas reserves. As coal remains the dominant fuel, coal-fired power plants in central and western province areas will generate more power to feed demand-heavy coastal centres through long-distance power transmission grids. Additionally, the west holds the majority of renewable energy potential – hydropower, wind and solar. We also expect shale gas production in the west to ramp up, particularly from Sichuan, Shaanxi and Xinjiang, to around 140 billion cubic metres (bcm) by 2035. ”
Wood Mackenzie says the third implication is that planned transport infrastructure build will open up new markets in Central Asia and facilitate energy imports into China via its western border. China is planning two main routes – the new land-borne ‘Silk Road Economic Belt’ and the ‘21st Century Maritime Silk Road’, from southeast China to west Asia, via the South China sea. Infrastructure development will make Xinjiang a key gateway for commodity trade between China, Central Asia and Russia. Ms Lim says, “Xinjiang is strategically important because of its rich energy resources and as a transport hub with oil and gas supplies from Central Asia and Russia converging before being distributed for use in the east.
“For China’s west to fulfil its growth potential, significant investment is needed in energy production and transport infrastructure. We estimate that investment in new power generation capacity and coal mines in Xinjiang, for example, will total US$140billion (bn) and US$120bn respectively in the next 20 years. However, there are also key risks to the success of this commodity superhighway that investors will have to watch for.”
Wood Mackenzie's analysis says the risks are: Firstly, the pace and scale of economic and energy reforms - slow progress in restructuring provincial government debt and introducing market pricing for gas and power could subdue western development. Secondly, the rate of building infrastructure for power transmission as this is key for the success of trade routes with coastal China and Central Asia. Thirdly, water scarcity as it could mean coal mining and power plants that already face cost pressure from extra raw material preparation requirements like coal washing could face higher costs. Lastly, political risks must be managed – this includes diplomatic relationships with China’s Central Asian neighbours in building the new trade routes as well as potential domestic unrest in Xinjiang.
Ms Lim concludes, “Many of the risks can be mitigated through government support and finance but the geopolitical and social risks are far less predictable. China’s west has the energy resources, cost advantages and policy support to become a new energy and commodity superhighway, re-defining the flow of trade for decades to come. It could drive robust GDP growth for China through the longer-term and strengthen China’s economic and political influence with its neighbours. Given the high stakes of this commodity superhighway, success of the Go West strategy is a major Chinese government priority.”
About Wood Mackenzie:
Wood Mackenzie is a global leader in commercial intelligence for the energy, chemicals, metals and mining industries, providing objective analysis and advice on assets, companies, and markets to leading international and national energy and metals companies as well as financial institutions and governments.
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Monday, 01 June 15
35,000 MW POWER PLANTS TO BOOST COAL CONSUMPTION - JP
The government’s program to develop 35,000 megawatt (MW) power plants will increase domestic coal consumption, which currently stands at arou ...
Monday, 01 June 15
API 5 FOB NEWCASTLE COAL SWAP; Q1'16 CLOSED LOWER COMPARED TO Q3'15
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery gained US$ 0.36 per MT (0.80%) month over month. The swap was closed at US$ ...
Monday, 01 June 15
CFR SOUTH CHINA COAL SWAP: GAINED W-W, M-M; Q1'16 CLOSED HIGHER THAN Q3'15
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery up US$ 1.15 (2.26%) per MT month over month.
A commodity swap is a f ...
Sunday, 31 May 15
CAPE AND PANAMAX SEGMENTS SLIDE CONTINUES
COALspot.com: The BDI was up about 0.5 pct week on week and closed at 589 points while the cape index was fell 0.73 pct and closed at 810 po ...
Friday, 29 May 15
DRY BULK MARKET IS THE VICTIM OF A SHIFT IN DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The fall in dry bulk freight rates is attributed, in large part, to the substantial decrease of China’s thermal coal imports, a major commodi ...
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- Antam Resourcindo - Indonesia
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- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
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- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
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- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
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- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
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- Medco Energi Mining Internasional
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- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
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- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
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- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Indian Energy Exchange, India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Planning Commission, India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
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- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
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