April 30th AKRR summary

FYI - The Atlantic has a good cover story by Charles Mann: What If We Never Run Out of Oil? 

The last three weeks in export coal-related news:

CHINA

China's domestic coal production has posted a rare decline, raising new questions about the strength of the economy (Apr 29/Michael Lelyveld/RFA). Michael Lelyveld is always worth reading. He reports that electricity production growth numbers are surprisingly low and that coal imports are up over last year.

China Coal Falls to Lowest Price in Three Years; Stockpiles Drop (Apr 21/Jing Yang/Bloomberg). The stockpile drop is the result of planned maintenance on Qinhuangdao line, not market forces. 

Faltering China demand hangs over Asian coal (Apr 17/Reuters/Fayen Wang). China's thermal coal demand has stalled and imports are set to fall this quarter, producers and traders say, removing the main prop of the Asian market and threatening to cut already weak benchmark Australian coal prices. 

For China's coal miners the outlook is bad. Demand is flat, prices are dropping and imports are increasing. Their only course of action may be to cut production in order to put a floor under prices (Apr 26/Securities Daily/Tang Zhenwei). Shenhua, China's largest coal company, has directed its production units to cut costs 5% . At the same time,electricity producers are enthusiastically seeking imports. The current per tonne price difference between Australia and China is RMB 20-30 (USD $3-$5) and between Indonesia and China is RMB 40-50 RMB and (USD $6-$8). 

On another front, China's domestic coal industry may launch a formal effort to convince the government to create new tariffs on imported coal (in Caijing, citing another report). They want a direct tariff, a VAT, and additional tariffs on low-calorie, high sulfur coal in order to raise domestic prices and limit competition from imports. Relevant bureaus are expected to be cautious introducing any such tariffs because of unexpected trouble they encountered upon inserting tariffs into the coking coal market a few years ago.

JAPAN

Japanese utilities and Australia coal sellers agreed on $95 per tonne price. The new price is down $20 or 17% from last year.  

Reuters April 12th: "Australia's largest thermal coal exporter Xstrata Plc and Japan's Tohoku Electric Power Co have settled a benchmark annual supply contract 17 percent lower than last year, in a victory for cost-pressured Japanese utilities. . . .The price level, which was in line with most analyst expectations, will likely be followed by other Japanese utilities and will be used as a benchmark for Asia."

AUSTRALIA

Australia's environment minister said that he never saw his own agency's risk assessment saying that a proposed coal port posed "extreme" risks at the Great Barrier Reef.

The new Japanese benchmark price is less than the cost of production for 5 millon tonnes of Australian thermal coal and may lead to reductions in supply.

Greenpeace boarded an Australian coal ship bound for S.Korea.

US

The Economist magazine had an overview of the Pac NW export coal dispute: Dirty War.

Tata Power, India’s second- largest generator, is seeking coal assets in the U.S.

Apr 9th, AKRR Summary:

Reading the news about the Pacific thermal coal markets for the past two weeks, one can't help but be pessimistic about prices for the rest of 2013 and 2014. Newcastle benchmark price forecasts for the coming year were reduced several percent by two bank research groups; and the failed Japanese coal contract talks are re-starting next week with what looks to be an 8% cut from the price Australian suppliers anchored themselves to just last week. Perhaps this creates a temporary opening for alternative suppliers like us but, speaking generally, bodes ill for prices. 

Japan

Short Term: Power producers and Australian coal suppliers will restart contract negotiations that timed-out on April 1st due to a major disagreement on price. The new prices could be up to $20 less per tonne than those agreed to this time last year (6,300kcal/kg Newcastle was $115 last year for April 2012 -March 2013 contract).  If the parties can reach an agreement this time around, prices will likely be between $94 & $97 per tonne.

Long Term: Shinzo Abe went to Ulan Bator. Although the idea of thermal coal making it from Mongolia to Japan seems far-fetched right now, it is possible. According to the FT:

A big target for Japan is the Tavan Tolgoi coal deposit, one of the biggest in the world, located in the Gobi desert. Japan’s demand for fossil fuels has jumped since the March 2011 Fukushima disaster all but shut down its nuclear-power sector. Mr Abe urged Mongolian leaders to consider allowing Japanese trading companies and other groups to participate in developing the field. Japanese companies were initially left out of a 2011 plan to develop half of the Tavan Tolgoi deposit but those plans have changed and the government plans to build a railroad from the mine that could one day export coal to Japan via Russia.

Australia

In a vote of No Confidence in thermal coal markets, Rio Tinto is going to sell $3bn of  thermal coal assets in Australia. Coal India is interested buying. See Japan section for details on failure of supply contract negotiations that direclty affect Australian supply.

Indonesia

The price for low-grade power-station coal in Indonesia, the world’s biggest exporter of the fuel, fell last week as Chinese stockpiles rose,according to a Bloomberg News survey, Jakarta Globe reported. 

US Port projects

The Coos Bay project was all but canceled. It was the 2nd of 6 proposed Pacific NW coal terminals to be scrapped. 

The Sierra Club plans to sue BNSF and six coal companies for polluting Northwest waters without Clean Water Act permit. 

The two largest projects of the 6 proposed appear to have moved slightly forward.  Platt's: "the two largest export coal terminals proposed in the Pacific Northwest cleared regulatory benchmarks Monday, according to the Washington State Department of Ecology. The state agency has hired ICF International, an environmental consulting company, to help manage the scoping process for the proposed Millennium Bulk Terminal in Longview, Washington, it said Monday .. . Additionally, the state agency released Monday a summary of the roughly 125,000 scoping comments it collected recently for the proposed Gateway Pacific Terminal." 

Platt's list of projects with status:

Terminal	Location	Capacity	Status
Gateway Pacific Terminal	Cherry Point, Washington	48-54 million mt	Pursuing permits, environmental impact assessment
Millennium Bulk Terminals	Longview, Washington	44 million mt	Pursuing permits, environmental impact assessment
Morrow Pacific	Boardman, Oregon	8 million mt	Pursuing permits, environmental impact assessment
Port Westward	Port of St Helens, Oregon	N/A	Due dilligence
Project Mainstay	Port of Coos Bay, Oregon	10 million mt	Abandoned
Port of Grays Harbor	Hoquiam, Washington	5.5 million mt	Abandoned

China:

Short Term Outlook: 

Coal prices in Asia are poised to stall after the biggest quarterly gain in two years as demand from China fails to absorb increased exports from Australia, Colombia and Indonesia (Businessweek Bloomberg).

"Rising hydro power output and swelling coal stockpiles are eroding China’s import needs, threatening returns for producers such as Rio Tinto Group (RIO) and Xstrata Plc (XTA) that are seeking to curb costs to offset falling prices. At the same time, output is increasing from Colombia and Indonesia, the world’s biggest exporter, according to a report last month from Australia’s Bureau of Resources and Energy Economics.

“There isn’t a number two option after China,” said Michael Parker, an analyst at Sanford C. Bernstein & Co. in Hong Kong. “You’re going to see a decrease in thermal-coal imports into China this year because we have a situation where coal prices are now falling at a time of year when they should be going up.”

“The market is well-supplied in China,” Andrew Driscoll, the head of resources research at CLSA Ltd. in Hong Kong, said in an e-mail. “We forecast thermal coal imports down a little this year to 160 million tons.”

. . . Deutsche bank reduced its 2013 estimate for Newcastle coal by 3 percent to $92 a ton.

. . . Newcastle coal may trade within a range of $85 a ton and $95 a ton from 2013 to 2014 as exporters compete with domestic output in China, Macquarie Group Ltd. analysts including Colin Hamilton in London said in a March 27 note. The fuel may trade toward the bottom end of the range in the near term, they said.

Long Term Outlook (China):  

IHS CERA predicts that Chinese coal imports will peak and then slip into a "prolonged" decline as moderating demand combines with increased domestic production. "Many companies that have targeted China as their strategic supply region in the long term may need to rethink that strategy," Xiaomin Liu, IHS CERA's associate director in Beijing, said. "Some international suppliers will be able to compete effectively, but others will struggle to find a competitive edge as China's market becomes ever more liquid." The US coal industry shouldn't continue to count on China as a major export market, according to a private research firm's recent report whose findings are drawing criticism and skepticism.

Sinopec Group, in an effort to find economical ways to tap Xinjiang's massive thermal coal reserves, is going to invest $11.3 billion to build the country's largest coal-to-gas project. The project will have annual production capacity of 8 billion cubic metres of gas -- and they already have the gas pipeline.

Here is a link to the 60 page Deutsche Bank report forecasting that China will return to exporting coal by 2017 (instead of 2025) IF they undertake measures need to get the air pollution problem under control. The analytic foundation of the report gives new meaning to the idea of building castles in the air -- but is still a useful exercise for understanding what what China would have to accomplish to have safe air to breath.

NYTimes: Air Pollution Linked to 1.2 Million Premature Deaths in China. ANNUALLY - and this is a conservative estimate.

In case you think the pollution and policy angle in China is much ado about nothing, here is another way to gauge the scale of China's coal consumption: within 400 miles of Beijing power plants burn almost as much coal in a year as does the entire United States electricity industry. Add to that lower emission standards, weather patterns and a geography that conspire to trap the pollution during winter, as well as sand storms originating on the steppes of the Gobi desert and you get the the worst air in the world, perhaps ever. There are recent pollution cost estimates ranging from 1.5% to 3.5% of annual GDP. Of course those estimates are just for current deaths. Someone should do a study discounting the costs associated with increased cancer rates, future cardiovascular disease-related deaths and the nascent epidemic in birth defects. The Chinese government will almost certainly have to act to curb coal use in the next few years and disperse industrial activity and generation clusters to the interior and west of the country - away from the ports.

Beijing exodus: Expats may be about to leave Beijing in record numbers as soon as the school year ends -- and rich Beijingers are accelerating their backup emigration plans. 

The already strained-beyond-imagining Dongbei water supply is moving into crisis, thanks in large part to coal plants that consume too much water. 

Other potential supply into China

Russia: Mr. Xi went to Russia to meet Mr. Putin. China’s Shenhua Group and Russia’s EN+ Group agreed to develop coal resources and related infrastructure in East Siberia and the Russian Far East with an eye to expanding Russian coal exports to China. China Development Bank to finance.

Mongolia is seeking someone to build a coal railway from Tavan Tolgoi mine (mostly coking coal) to China. Insisting on using russian gauge instead of standard gauge as if that will stop Mongolia becoming China's mineral colony.

Kyrgyzstan is aiming to become a major coking coal supplier to the Xinjiang Uygur autonomous region.

Abe moves to boost ties with Mongolia
FT - By Jonathan Soble in Tokyo

Japanese premier Shinzo Abe moved to boost ties with another Chinese neighbour at the weekend, visiting Mongolia where he offered increased foreign aid and referred to the countries’ “shared democratic values”.

Second NW terminal scrapped, not reflection on others
Platts / 8 Apr 2013

Terminal	Location	Capacity	Status
Gateway Pacific Terminal	Cherry Point, Washington	48-54 million mt	Pursuing permits, environmental impact assessment
Millennium Bulk Terminals	Longview, Washington	44 million mt	Pursuing permits, environmental impact assessment
Morrow Pacific	Boardman, Oregon	8 million mt	Pursuing permits, environmental impact assessment
Port Westward	Port of St Helens, Oregon	N/A	Due dilligence
Project Mainstay	Port of Coos Bay, Oregon	10 million mt	Abandoned
Port of Grays Harbor	Hoquiam, Washington	5.5 million mt	Abandoned

A second proposed coal export terminal in the Northwest was scrapped last week, but it is not seen as a reflection on the ability of the four remaining terminals to proceed.

"We're not seeing a trend. The two projects not moving forward were the two most speculative," Lauri Hennessey, a spokeswoman for the Alliance for Northwest Jobs and Exports, said Wednesday.

Coal India seeks to buy Rio Tinto's mines
Thursday, Apr 4, 2013, 4:00 IST | Place: Kolkata | Agency: DNA
Sumit Moitra

State-owned Coal India Ltd (CIL), the world's largest coal miner, is eyeing Anglo-Australian mining giant Rio Tinto's coal mines, particularly those in Australia, sources in the know told DNA.

Battered by falling global coal prices, rising input costs and strengthening of the Aussie dollar, Rio Tinto has put on the block some of its coal assets like Coal and Allied Industries in Australia’s New South Wales province and other mines in Queensland.

Japanese power, Australian coal producers to resume contract price talks
Platts /8 Apr 2013

More talks have been scheduled between Australian coal producers and their Japanese power utility customers in an attempt to reach a settlement for Japanese financial year (April-March) contract prices which have become deadlocked, market sources said Monday.

Talks overran their April 1 target date this year, and, in an effort to reach a settlement, an Australian thermal coal supplier has agreed to meet Tohoku Electric Power this week and possibly next week, said industry sources.

"Now the prices seem to be in the range of $94-97/mt FOB [basis 6,322 kcal/kg gross-as-received] for the talks, and those numbers could seriously hit the supply capability of the Australian thermal coal industry," said one market participant familiar with the matter.

A price outcome of this kind would be much lower than last year's contract price settlement of $115/mt FOB Newcastle for annual, April-March fuel supply agreements. 

Thermal coal caught in Mexican stand-off
FT / Javier Blas / Apr 2

The global thermal coal industry is in the midst of a rare Mexican stand-off, with billions of dollars of coal shipments and mining investments at stake.

The Australian coal miners, led by Xstrata, and the Japanese utilities, with Tohoku Electric Power Co. as top negotiator, have failed to reach an agreement for their annual supply contracts by the unofficial deadline of April 1.

Worse, the two sides remain far apart, and executives involved in the talks say a deal is unlikely until mid-month. But one fact appears clear: for the first time in three years the annual contracts could be settled below the key $100-a-tonne level.

China to build largest coal-to-gas project
Monday, April 08, 2013

Sinopec Group, China's second largest energy company is to invest up to $11.3 billion (70 billion yuan) to build the country's largest coal-to-gas project in 8-10 years to meet a rising demand for natural gas.

The project will be developed in China's northwestern region of Xinjiang and will have annual production capacity of 8 billion cubic metres of gas.

Coal extracted from two mines in Zhundong will be used to feed coal-to-gas production facilities nearby. The coal mines have annual production capacity of 15 million tonnes each.

The natural gas produced will be transmitted through Sinopec Group's 30 bcm/year pipeline stretching from Xinjiang to Guangdong province in south China to Zhejiang province in east China.


Indonesia low-grade coal prices seen falling on China supply
Borneo Post March 16, 2013, Saturday

The price for low-grade power-station coal in Indonesia, the world’s biggest exporter of the fuel, fell last week as Chinese stockpiles rose, according to a Bloomberg News survey, Jakarta Globe reported news.

Indonesian coal with a calorific value of 4,000 kilocalories a kilogram and 0.5 percent sulfur averaged $39.62 a metric ton in the week ended March 8, down from $42.93 a ton a week earlier, according to the median forecast of three traders in the survey.

Caterpillar cuts highlight mining woes
By Neil Munshi in Chicago

Heavy industry is known for its toughness but one of its biggest players is taking a battering.

Caterpillar, the world’s largest maker of earthmoving equipment, has announced plans to cut about 2,000 jobs in recent weeks, in a further sign of how weakness in the global mining industry and low commodity prices are hurting heavy industry.

The mining industry is being hit on two fronts. The US shale gas boom has driven down natural gas prices, which has caused many power producers to switch from coal to natural gas, while the industrial slowdown in China has also slowed demand for resources in the world’s largest consumer of mined commodities.

Deutsche Special Report on China Air Pollution
Big bang measures to fight air pollution 
To reduce air pollution to a safe level, China will have to drastically change its 
policies on energy, auto, environment and public transport systems. 

Loser # 1: Coal Our projection of coal consumption under the proposed policy package is substantially lower than current market consensus. Our new forecast looks for only 2% annual average growth of coal consumption from 2013-17, vs. our old forecast and market expectations of about 4% (Figure 48). If the long-term volume growth is reduced by more than half, and the sector’s pricing power and profit margin are also lowered due to weaker-than-expected demand, the market reaction could be a de-rating of 20% (e.g.the PE multiple contracts to 7x from 9x), according to cross-country data. We do not think it will happen in the very short term, but do believe it will come sooner than many investors’ perception.

Our coal analyst, James Kan, believes that if the coal consumption scenario under the proposed policy package indeed materializes, China will potentially become a net exporter of coal again (currently China net imports about 200mt a year). That will impact the regional coal industry as well because China’s net import of thermal coal accounts for one quarter of international seaborne thermal coal market. By 2015, thermal coal price could be lower than the current level and marginal cost producers would be pushed out of the economical supply. For H-listed thermal coal stocks, Yanzhou Coal (1171.HK) would be the biggest loser as the company’s assets are generally of high costs and thus some of Yanzhou’s mines will no longer be economical.

Beijing residents rethink life in big smoke

By Jamil Anderlini and Leslie Hook in Beijing

A winter of terrible air pollution in Beijing is likely to be followed this summer by an exodus of expatriates fleeing the Chinese capital, according to senior executives, diplomats and businesses that cater to the expat community.
But it is not just foreign residents who are contemplating leaving and it is not just a couple of months of hazardous smog that has convinced them to go.

China remains a key coal market

The US coal industry shouldn't continue to count on China as a major export market, according to a private research firm's recent report whose findings are drawing criticism and skepticism.

The study by Englewood, Colorado-based research firm IHS CERA predicts that Chinese coal imports will peak and then slip into a "prolonged" decline as moderating demand combines with increased domestic production.
"Many companies that have targeted China as their strategic supply region in the long term may need to rethink that strategy," Xiaomin Liu, IHS CERA's associate director in Beijing, said. "Some international suppliers will be able to compete effectively, but others will struggle to find a competitive edge as China's market becomes ever more liquid."

Sierra Club plans to sue railroads, coal companies over coal dust pollution in Northwest

LYLE, Wash. -- At the railroad berm that divides Horsethief Lake from the Columbia River, you can stick your hand between the rocks and come up with fistfuls of crumbly coal-black pebbles and dust.

Rio Tinto Seeks to Sell Australia Coal Stakes
WSJ

Rio Tinto RIO.LN -0.35% PLC has put stakes in several Australian thermal-coal mines on the block in sales that could fetch around US$3 billion, people familiar with the matter said Wednesday.

In the biggest deal, Rio Tinto is seeking a buyer for up to 29% of its Coal & Allied unit as it moves to cut costs and boost shareholder returns. The mining company wants to reduce its interest in Coal & Allied, which owns mines in eastern Australia's New South Wales state, to as little as 51% and has hired Deutsche Bank DBK.XE -0.88% to handle the sale, the people said.

Coal Seen Stalling After Best Quarter Since 2011: Energy Markets By Ben Sharples on April 03, 2013

Coal prices in Asia are poised to stall after the biggest quarterly gain in two years as demand from China fails to absorb increased exports from Australia, Colombia and Indonesia.

Kyrgyzstan sets sights on Xinjiang coal market
But construction of rail link essential to the Central Asian nation's fuel-supply ambitions
SCMP
Eric Ng

Kyrgyzstan is aiming to become a major coking coal supplier to the Xinjiang Uygur autonomous region.

But the goal will only be realised if a railway is built to link China to the landlocked and mountainous nation in Central Asia to allow low-cost transport of bulk commodities.

State-owned China Road and Bridge Corporation was completing a feasibility study on a railway that would link China's far-western rail terminus at Kashgar in Xinjiang to the Kyrgyz-Uzbek border town of Kara-Suu, said Kyrgyzstan's Economy Minister, Temir Sariev.

He said one proposed route of 300 kilometres would traverse rugged terrain and cost about US$2.5 billion, while a 390-kilometre alternative would cross valleys and villages and cost over US$4 billion.

Air Pollution Linked to 1.2 Million Premature Deaths in China
NYT
Edward Wong

BEIJING — Outdoor air pollution contributed to 1.2 million premature deaths in China in 2010, nearly 40 percent of the global total, according to a new summary of data from a scientific study on leading causes of death worldwide.

Figured another way, the researchers said, China’s toll from pollution was the loss of 25 million healthy years of life from the population.

The data on which the analysis is based was first presented in the ambitious 2010 Global Burden of Disease Study, which was published in December in The Lancet, a British medical journal. The authors decided to break out numbers for specific countries and present the findings at international conferences. The China statistics were offered at a forum in Beijing on Sunday.

Port of Coos Bay coal export proposal ends after 18 months of work
The Oregonian -Scott Learn
The Port of Coos Bay said that it has ended its exclusive negotiating agreement with Metro Ports of California, which had been exploring a coal export terminal in Coos Bay.

The project was one of five under consideration in Oregon and Washington. It was also the only one likely to bring mile-plus coal trains through southeast Portland, Milwaukie, Salem and Eugene.

Coal exports from Australia Newcastle port exceed forecast in March
According to Newcastle Port Corporation, coal shipments from the Port of Newcastle in Queensland, the coal producing state of Australia, totaled 3 million tonne.

The figure constitutes an increase of 26.4% compared to the previous week ended March 25th, in which a WoW increase of 1.3% in coal shipments had been observed.

Money Talks: China-Russia Energy Relations after Xi Jinping’s Visit to Moscow
The series of energy deals signed during Chinese President Xi Jinping’s visit to Moscow in March 2013 underscore the important role that Chinese capital -- primarily in the form of loans from China Development Bank (CDB) --plays in spurring Eurasian economic integration. The nonbinding agreements inked by Chinese and Russian firms have laid the groundwork for the creation of new energy corridors stretching from Russia to China. Indeed, Xi spoke of oil and natural gas pipelines functioning as an artery connecting China and Russia in the 21st century like the tea road over which traders exchanged Chinese tea for Russian furs did in centuries past. The key to substantially expanding energy trade between Russia (one of the world’s largest exporters of oil, natural gas and coal) and China (one of the world’s largest importers of oil and coal and a growing importer of natural gas) is likely to be CDB. The bank not only has the motivation and means to finance the infrastructure needed for the cost-effective delivery of substantially larger volumes of Russian energy to China. It also has an established track record as a driver of regional economic integration.

Proposed Northwest coal export terminals inch forward
Washington (Platts)--1Apr2013/526 pm EDT/2126 GMT
-Andrew Moore, andrew_moore@platts.com

The two largest export coal terminals proposed in the Pacific Northwest cleared regulatory benchmarks Monday, according to the Washington State Department of Ecology.

The state agency has hired ICF International, an environmental consulting company, to help manage the scoping process for the proposed Millennium Bulk Terminal in Longview, Washington, it said Monday.

CAIJING 电改试金石
对电力体制进行市场化改革是中国最高层11年前的决策，延宕至今，电力改革的理论准备、舆论准备、国际经验、国内探索都已非常充分，改革能否继续，是中国政府推进市场化改革意愿和能力的试金石

Yanzhou Coal to invest $628m in Australian coal assets
EBR Staff Writer -- Published 27 March 2013

China-based mining company Yanzhou Coal Mining has outlined plans to invest A$600m ($628m) to increase the output from its Australian coal assets.

The company expects to raise the coal production capacity in Australia to 50 million metric tons by 2017, up from 26 million tons recorded in 2012, reported The Wall Street Journal.

Commenting on the developments, Yanzhou chairman Li Weimin told the news agency that the company has set a conservative target for its planned expansion in Australia.

The demand in Asia is expected to pick up in two to three years, and high-quality coal from Australian mines can capture the growth, added Weimin.


Mongolia Seeks Partner for Coal Railroad to China, Montsame Says
Bloomberg / Michael Kohn

The Mongolian government is seeking a non-state partner to build a 160-mile (260-kilometer) railway from the Tavan Tolgoi coal field to the Chinese border, the state-run news agency Montsame reported.

The government has accepted bids from 20 companies, including 14 from overseas, the agency said yesterday, without identifying any. The partner will take a 49 percent stake in the project.

Tavan Tolgoi, one of the largest coal deposits in Mongolia, has an estimated 6.4 billion metric tons of reserves, 70 percent of it coking coal for steelmaking. Mining companies at the site, including Hong Kong-listed Mongolia Mining Corp., currently deliver supplies to the border by truck.


ASIA THERMAL COAL: Traders in China switch to Indonesian low cv coal
Platts -- 27 Mar 2013

Chinese buying interest was mostly concentrated on cargoes of lower calorific value thermal coal from Indonesia Wednesday, as traders expressed fears that another decline in domestic thermal coal prices was not far away and could have a destabilizing effect on Chinese spot demand.

..."We have decided not to buy any spot overseas coal for the time being," a Guangdong-based trader said, adding that his firm would focus instead on term contract deals.

Freight costs for coal shippers have plateaued after rallying recently ...

...Some coal producers were less willing to offer cargoes until there was an outcome to talks in Japan to settle April dated annual supply contracts for power utilities.

"A number of coal producers are concentrating on the Japanese negotiations. When they are out of the way, they can start to look at the market again and sell their tons more aggressively," said a trader in Singapore.

...
"Many of the mines in Shanxi have lowered their prices at the pithead. Coal mines are under great pressure," the Chinese trader said, as he expressed uncertainty about the market's direction two months out.

"We can only hope power plants become more active and start to restock by mid-April," he said.

...
"[Chinese buyers] are convinced that Indonesian sellers will have to readjust their prices to international market conditions, depending on when the [Indian] monsoon starts to kick in," he said.

--Mike Cooper, michael_cooper@platts.com


China Coal Producers Seek New Ventures
WSJ

China's coal power sapping up water supply
China's coal power sapping up water supply
Published By United Press International - BEIJING, March 27 (UPI)

Northern China's electricity sector is depleting the arid region's water, says a new study.

Coal-fired power generators in the north, along with coal mining in the same region, were responsible for withdrawing 98 billion cubic meters of fresh water in 2010, nearly 15 percent of China's total fresh water withdrawals that year, says the Bloomberg New Energy Finance report.

While northern China has 60 percent of the country's thermal power, it contains only 20 percent of its fresh water supply.

The report cites China's top five state-owned utilities -- China Huaneng Group, China Datang Corp., China Huadian Corp., China Guodian Corp. and China Power Investment Corp. -- which together have hundreds of gigawatts of coal-fired power plants in the arid northern region.

If the five companies continue with development of coal-fired power plants, those water withdrawals would be 25 percent beyond the government's 2030 target of capping national water withdrawals at 700 billion cubic meters per year, the report says.

But retrofitting the plants with water-efficient solutions could cost billions of dollars, Bloomberg says.

"Thermal plants will have to use more efficient technologies -- but doing so will drive up both capital and operating expenditure," Alasdair Wilson co-author of the report, said in a statement.

Airpocalypse’ drives expats out of Beijing

By Jamil Anderlini in Beijing

Extreme air pollution is driving expatriates out of Beijing and making it much harder for companies to recruit international talent, according to anecdotal accounts from diplomats, senior executives and businesses that cater to the expat community.