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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, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
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- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Planning Commission, India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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