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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, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Mintek Dendrill Indonesia
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- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
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- Price Waterhouse Coopers - Russia
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- Kepco SPC Power Corporation, Philippines
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- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
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- Semirara Mining and Power Corporation, Philippines
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- Karaikal Port Pvt Ltd - India
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- London Commodity Brokers - England
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- Georgia Ports Authority, United States
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- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
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- Thai Mozambique Logistica
- Indian Oil Corporation Limited
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- Posco Energy - South Korea
- Bangladesh Power Developement Board
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- Standard Chartered Bank - UAE
- White Energy Company Limited
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- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
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- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
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- Samtan Co., Ltd - South Korea
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- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
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- Eastern Coal Council - USA
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