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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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Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Planning Commission, India
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
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