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