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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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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Economic Council, Georgia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Australian Coal Association
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
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