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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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Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- PTC India Limited - India
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
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