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