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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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Thursday, 11 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitc ...
Wednesday, 10 June 20
MARKET INSIGHT - INTERMODAL
In contrast to the economic projections of the past two years for the first half of 2020, the oil & gas industry and those involved in it faced ...
Wednesday, 10 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.19 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.71 points Monday, down 0.19 percent week on week.
The index, released by Chi ...
Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
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- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- The University of Queensland
- India Bulls Power Limited - India
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- White Energy Company Limited
- PTC India Limited - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Planning Commission, India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
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