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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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Friday, 27 March 15
INDONESIA: NEW REGULATION REQUIRES LETTER OF CREDIT FOR EXPORT OF PRODUCTS FROM NATURAL RESOURCES
The Minister of Trade issued Ministerial Regulation No. 04/M-DAG/PER/1/2015 (“Regulation No. 4/2015”) on 5 January 2015. Regulati ...
Friday, 27 March 15
WEEKLY U.S COAL OUTPUT FALLS 1.7% W-W; 7.9% Y-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately totaled an estimated 18.2 million ...
Thursday, 26 March 15
CHINA IRON ORE IMPORT FOR THE FIRST 2 MONTHS DECLINED BY 1.2 % Y-O-Y; PANAMAX AUSSIE/CHINA ROUNDS BEING FIXED IN THE $4 -5K RANGE - FEARNLEYS
Handy
There has been more activity in both hemispheres this week. Especially the USG market has picked up with more cargoes for prompter dates en ...
Thursday, 26 March 15
RATES FOR THE SMALLER SIZE SEGMENT CONTINUED TO IMPROVE LAST WEEK - INTERMODAL
To see green across the board is a rare occurrence in the Dry Bulk market nowadays and while the upside in which last week closed off is not of the ...
Thursday, 26 March 15
KYUSHU ELECTRIC POWER OF JAPAN HAS JOINED GLOBALCOAL ONLINE COAL TRADING PLATFORM
globalCOAL® announced today that Kyushu Electric Power, one of Japan’s largest utility companies, has joined its online coal trading plat ...
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- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
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