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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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Tuesday, 07 July 20
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Monday, 06 July 20
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Monday, 06 July 20
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Thursday, 02 July 20
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Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
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- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Planning Commission, India
- Romanian Commodities Exchange
- The University of Queensland
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Australian Coal Association
- Star Paper Mills Limited - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
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