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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, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
Wednesday, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
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- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
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