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Wednesday, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
 High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power shortfalls seen recently in parts of the country are unlikely to drive large-scale shifts in investment plans, as the problems reflect weak peak-load flexibility rather than structural power shortages.
Total power consumption rose 9.4% yoy in November 2020, according to the China Electricity Council, and peak loads have reached record levels for many regional grids. Demand for power has been supported by robust economic growth, but also by unusually cold conditions that have bolstered demand for heating.
A variety of supply factors have also contributed to the power shortages. In areas such as Hunan, renewables contributions, particularly from hydropower, have been weak as a result of weather conditions. Regulatory pressures to curb thermal power carbon dioxide emissions in order to meet targets under the 13th Five Year Plan (ending in 2020) have also played a role in regions like Zhejiang.
Coal market dynamics have aggravated the situation. The government’s supply-side reform agenda has sought to improve the underlying stability of domestic coal markets by trimming excess supply, but in the near term this has reduced capacity to meet spikes in demand. Supplies have been dented further by tougher mining permit reviews and safety checks in Inner Mongolia, an important production region, and the impact of cold weather on transport systems and production in northern China.
Restrictions on imports of thermal coal from Australia may also have played a role at the margin. Such imports are small relative to total demand, and China has increased coal imports from other producers like Indonesia, but the curbs may have increased the vulnerability of local coal prices to demand spikes.
Meanwhile, in some provinces gas-fired power plants have failed to play their usual role in smoothing peak-load adjustments, as gas supplies were prioritised for heating in northern China. Gas-fired power’s contribution to generation has risen in January as additional gas has been sourced for heating, easing supply constraints.
There is no fuel-cost pass-through for coal. High energy prices will thus dampen near-term profitability among generating companies (gencos) with greater reliance on coal. This could affect Fitch-rated companies such as China Huaneng Group (A/Stable), China Huadian Corporation (A/Stable), State Power Investment Corporation (A/Stable), Guangdong Energy Group (A/Stable) and Zhejiang Provincial Energy (A/Stable). However, strong demand should raise capacity utilisation and reduce the price discount on market-traded power, offsetting the impact slightly.
Upstream producers such as Yanzhou Coal (BB-/Rating Watch Positive) and the three national oil companies should benefit from these same dynamics. However, we still expect coal prices to trend lower in the longer term, as the government remains committed to reducing coal’s share in the national energy mix.
The State Council stated on 8 January that development of natural gas and coal storage facilities, and emergency back-up power systems, would be accelerated. We have already budgeted high levels of capex for most power gencos in the medium term, focused mostly on renewable energy, and do not expect to change our forecasts significantly owing to the recent disruption. In addition, we do not expect substantial additional investment in LNG storage, but believe the government will accelerate approvals for new gas storage facilities and slow the phase-out of coal-fired power plants.
The government may also encourage provinces with power shortages to make greater use of imports, which could benefit issuers from surplus regions like Gansu Province Electric Power Investment (BBB-/Stable). Inter-provincial ultra-high-voltage distribution lines are available, but have been underutilised during the current situation as the supporting coal-fired power has not been available.
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Wednesday, 16 June 21
MARKET INSIGHT - INTERMODAL
“While approaching the second half of the year and summer season is just around the corner, COVID vaccination programs are steadily moving fo ...
Monday, 14 June 21
'WISHFUL THINKING': WHY CHINA NEEDS AUSTRALIAN IRON ORE FOR 'MANY YEARS' TO COME - YAHOO FINANCE AU
A “wintry period”.
That’s what’s expected to happen to Australia’s economy “when” China st ...
Sunday, 13 June 21
COAL AND LNG’S SURGE IN ASIA PLAYS INTO RENEWABLE ENERGY HANDS - REUTERS
Liquefied natural gas (LNG) and thermal coal prices in Asia have been roaring ahead in recent months amid strong demand, but while welcome news for ...
Friday, 11 June 21
5 REASONS GLOBAL SHIPPING COSTS WILL CONTINUE TO RISE - ING
No short-term relief
Shipping costs have been growing strongly since the autumn of 2020, but the first months of this year have seen a new surg ...
Friday, 11 June 21
ASIA COAL PRICES SURGE, BUT CHINA-AUSTRALIA DISPUTE MEANS RALLY IS UNEVEN - REUTERS
Thermal coal prices across Asia have surged to multi-year highs amid strong demand and some supply constraints, but some types of the fuel have don ...
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- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- The University of Queensland
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
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