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Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
 China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in the first quarter of 2020, down 6.8%year-on-year. The power sector’s coal consumption fell 6.8%year-on-yearto 507mt,while construction sector usage fell 24.7% year-on-year to 65mt. Although the coal market remains volatile, industry observers estimate an average decline of 8% to 12% year-on-year in China’s coal demand. IEEFA currently estimates a 10% year-on-year fall in China’s 2020 coal imports, based on the following four key variables:
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Coal imports: From January to April2020,imports rose 27%year-on-year, but we note this is a function of lower prices.
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Domestic coal production: After declining year-on-year in January and February, output in March and April rose 6.4%and 6.0%year-on-year, respectively.
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Power generation: Thermal power generation declined 8.2%year-on-yearin the first quarter but rose 1.5%year-on-yearin April.
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Steel output: This increased 1.3%year-on-yearfor the first four months of 2020.
A detailed examination of China’s data, together with press commentary on the Chinese Government’s policy on coal imports, reinforces our view that caution is merited. According to media reports, China’s coal imports grew 22% year-on-year in April, and January to April 2020 imports increased 27% year-on-year, but the growth was boosted by lower prices for coal imports from Indonesia and Australia. The average April Newcastle benchmark price of US$56.2/tonne is 35% lower year-on-year.
According to media reports, China’s coal production experienced year-on-year growth of 6.4% in March and 6.0% in April. This growth is unsurprising as the National Energy Administration announced that China’s production had reached 83.4% of total coal mining capacity as of 3 March. The COVID-19-related disruption to China’s domestic coal output appears limited to January–February2020,when output declined 4.8%year-on-year, which is bad news for coal exporters to China. Additionally, 12 Chinese coal companies have called for a 10% cut in output from current levels to support domestic prices. The year-on-year growth in China’s domestic coal production would also tie in with government policy to impose an import quota this year that is set at 2017 levels, which are 10% below 2019 levels.
From January to April 2020, total Chinese power output fell 4.7% year-on-year, while thermal power output fell 5.9% year-on-year. In April, total power output grew 2.0% year-on-year, and thermal power output was up 1.5% year-on-year. From January to April 2020, 87 % of China’s thermal power capacity was from coal-fired plants, with the remainder from gas-fired facilities, according to the China Electricity Council. We note that even with the slight uptick in thermal power output for April, it is too early to suggest a sustained recovery in coal usage and imports.
China’s steel output serves as an indicator of economic activity. It rose1.3%year-on-yearfor January to April2020, indicating some stability. According to Mysteel Global, blast furnace capacity utilization rates at 163 mills rose to 85.6%, the highest rate in nearly 11 months, as of 15 May. However, against the backdrop of an increase in domestic coal production, this level of economic activity would still present downside risks for Chinese coal imports.
The outlook on government policy remains negative for exports to China, thanks to the coal import quota that seeks to maintain 2020 coal imports at the 2017 level of 270mt compared with 300mt in 2019. However, according to media reports, Guangdong and Fujian provinces used up the quota in the first four months of 2020. One positive sign for Indonesia’s exporters is the suggestion in media reports that China may reduce coal imports from Australia from July because of political tensions. Meanwhile, China’s coal producers have also been calling for government help. The China Coal Transportation and Distribution Association (the state-run representative body for domestic miners) has asked the National Development and Reform Commission to help restrict imports of cheap fuel. Additionally, 12Chinese coal producers have called for a 10% reduction in domestic coal output. Industry observers have estimated a year-on-year decline of 8–12%for China coal imports. This is in line with IEEFA’s conclusion that Chinese coal imports could decline 10%year-on-yearin 2020.
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org
About the Author Ghee Peh
Financial Analyst
Ghee Peh has worked in investment research since 1995, including at Jefferies, BNP Paribas, and UBS. He has covered Asian coal, cement and metal companies.
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Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
Wednesday, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
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- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
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- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
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- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Minerals Council of Australia
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