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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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Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
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- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
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