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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, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
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- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Chamber of Mines of South Africa
- The University of Queensland
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
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