Home / Energy/ Asia coal industry sees blue skies, ignores storm clouds

Asia coal industry sees blue skies, ignores storm clouds


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 15 May 2018 00:00


 

NUSA DUA, Indonesia  (Reuters) - Asia’s coal miners, shippers and traders are seeing strong demand and rising prices for their fuel, and they expect this happy situation to persist for several years to come.

It was a challenge to find anybody pessimistic about the outlook for coal in Asia, the world’s largest producing and consuming region, at this week’s annual gathering of the industry on the Indonesian resort island of Bali.

This was in stark contrast to the Coaltrans Asia conferences in prior years, where the moods were gloomy as the industry battled to survive five years of declining prices from 2011 to 2015 and policies aimed at cutting the use of the polluting fuel in the two biggest importers, China and India.

Certainly, it would seem that the industry has some reason to be optimistic, with Chinese imports up 9.3% in the first four months of the year, and hopes that India’s two years of declining imports will end in 2018.Prices are also performing better recently, with Australian benchmark thermal coal at Newcastle Port up to $101.35 a ton in the week ended May 6, a gain of 11.6% from the low so far this year of $90.68 at the end of March.

Even low-rank Indonesian coal is performing better, with Argus Media assessing 4,200 kilocalorie per kilogram (kcal/kg) coal at $42.79 a ton in the week to May 4, up from the 2018 low of $41.08 on April 13, and 18.2% higher than the low for 2017 of $36.20 in May of that year.

The main driver of coal’s improving performance is Chinese demand, with traders reporting buying interest from China for a variety of coal grades, from low-rank Indonesian fuel to higher quality coal from Australia.

The bullish Chinese story may have taken a slight hit in the April numbers, with customs data showing coal imports dropped to 22.8 million tons from 26.7 million the month before.

But traders at the Bali event expressed confidence that this was merely a blip, caused largely by some increased scrutiny by customs and certain port restrictions, impediments that they expect to only last a short time.

India’s imports were also lower month-on-month in April, dropping to 15.5 million tons from March’s 16.6 million, according to vessel-tracking and port data compiled by Thomson Reuters Supply Chain and Commodity Forecasts.

But India’s imports are up slightly in the first four months of 2018, to 60.4 million tons, a gain of 3% over the 58.6 million recorded in the same period last year.Although both China and India have shown only modest increases in imports so far this year, this is stoking optimism in the industry, especially when added to additional emerging demand from other Asian countries, such as Pakistan and Vietnam.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Things to do in a Democracy when you’re dead…

Tuesday, 18 December 2018

In yesterday’s column, I argued a case for not impeaching the chief executive of the coup that has left our country situation in ruins. At the end of a pitched battle between the forces of unconstitutional ambition on one hand and democratic resist


Tweaking the New Inland Revenue Act (Part II)

Tuesday, 18 December 2018

In the backdrop where the recent amendment to the country’s supreme law is called in question, it may be appropriate to recall that the passage of the new Inland Revenue (IR) Act through Parliament was far more controversial. Nevertheless, the new


Advancing gender parity in Sri Lanka

Tuesday, 18 December 2018

Asia-Pacific today is a true engine of growth in the world—a region that has barely tapped its potential to develop, invest, and innovate. But as the region speeds ahead, the dynamics of its workforce, one that was predominantly male in the past, i


What’s next after the Supreme Court decision?

Tuesday, 18 December 2018

Last Thursday, just before the courts closed for Christmas holidays, the Supreme Court, sticking strictly to a legalistic path, put an end to the controversial issue of defining the powers of President Maithripala Sirisena, leaving the nation to wres


Columnists More