Indian government to relax curbs on Indian firms chartering foreign ships

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Indian government to relax curbs on Indian firms chartering foreign ships

10th july 2018

The Ministry of Shipping is clearly in reform mode. On the heels of the recent relaxation of the cabotage law, which allows foreign flag vessels to operate in Indian waters, it is now set to allow Indian players to charter foreign flag carriers without any pre-conditions.
At present, a foreign ship is allowed to be chartered only — among other conditions — if a suitable Indian ship is unavailable for that purpose at reasonable charter rates.
In fact, the entire chartering rule book is set to see a significant simplification. These measures will increase the shipping capacity in the country, bring down the cost of transportation along the coast and eventually encourage coastal shipping. At present, only 100 million tonnes of cargo is moved along the coast in India, and 80 per cent of it comprises petroleum products, coal and iron ore.
“While we were relaxing cabotage rules, we found restrictive practices in the chartering of foreign vessels. We need to correct this quickly,” Shipping Secretary Gopal Krishna told BusinessLine.
At present, the number of ships available at the right price to carry cargo (both domestic and export-import) along the coast is inadequate, thanks to which people take either the road or rail route. “Once we have ships available at cheaper rates, we will encourage coastal shipping and the overall logistics cost will reduce significantly,” Gopal Krishna said.
An ‘Uber’ for ships
The overall easing of chartering rules, he felt, would give a fillip to entrepreneurship in the sector.
“By opening up, we give chance to our entrepreneurs who do not have enough funds to buy ships to come into the business by chartering a vessel,” he said.
The idea is similar to cab aggregation, which does not require an entrepreneur to own vehicles. “Our attempt is to increase shipping capacity, and a lot of cargo will move on our coast,” he said.
Source: THE HINDU BUSINESSLINE

Vessel carrying U.S. coal to China switches destination to Singapore: Eikon data

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Vessel carrying U.S. coal to China switches destination to Singapore: Eikon data

10th july 2018

A vessel carrying a shipment of coal from the United States switched its destination to Singapore on Wednesday afternoon from China, according to ship tracking data, amid an escalating trade row between the world’s top two economies.
The cargo was loaded on the Navios Taurus in Mobile, Alabama, on May 28 and had been due to arrive in China on July 18, but is now due to land in Singapore on July 13, Thomson Reuters Eikon data shows.
It was one of several ships on their way to China that may end up casualties of the escalating trade dispute between China and the United States.
One of the other vessels, called Partnership, reached China on Tuesday.
China has threatened hefty import tariffs on 659 U.S. products. Duties will start on Friday on some 545 items, but the government has not specified when coal and the remaining products could be hit.
Source: REUTERS

Saudi cement sector expected to record revenue decline in 2Q18

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Saudi cement sector expected to record revenue decline in 2Q18

10th july 2018

Saudi Arabia’s cement sector is expected to record a fall in revenue in the 2Q18, according to Al Rajhi Capital. The companies monitored by Al Rajhi are expected to announce a revenue decline of around six per cent YoY for the period, while earnings could decrease by approximately 10 per cent.
The sector’s sales volume fell 16.7 per cent in the first two months of the second quarter. Across the country, 15 companies have recorded a decline in sales volume, led by Riyadh Cement (-44.1 per cent) and Cement City (-37.5 per cent). However, both Tabuk Cement (+82.4 per cent) and Hail Cement (+28.7 per cent) recorded an increase, according to Trade Arabia.
Source: CEMNET

Argentine domestic dispatches down 4% YoY in June

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Argentine domestic dispatches down 4% YoY in June

10th july 2018

Argentina’s cement market contracted by 3.5 per cent to 970,978t in June 2018 from 1.007Mt in June 2017, according to the latest data from AFCP, the country’s cement association.
Output from the country’s cement plants slipped 2.8 per cent to 973,743t from 1.002Mt in June 2017. Of this total, 968,676t was delivered to domestic customers, down three per cent when compared with 998,478t in June 2017.
However, exports were up 35.7 per cent to 5067t in June. In June 2017 the country’s cement producers delivered some 3734t to export customers.
In addition, domestic production was supplemented by 2302t of imports, just over a quarter of an import volume of 8188t noted in June 2017.
January-June 2018
For the first half of 2018, Argentine cement consumption advanced 7.1 per cent to 5.913Mt from 5.519Mt in 1H17. Total production reached 5.889Mt, up 6.5 per cent when compared with 5.527Mt in the first six months of the previous year.
Domestic deliveries increased by 6.5 per cent YoY to 5.85Mt from 5.491Mt in 1H17. Exports rose to 38,825t over the six-month period, up 7.2 per cent from 36,227t in 1H17.
Around 62,878t of cement was imported into the South American country, representing a 23.2 per cent YoY increase. In 1H17 28,166t of cement was imported.
Source: CEMNET

Vietnamese consumption rises 30% YoY in June

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Vietnamese consumption rises 30% YoY in June

10th july 2018

Vietnamese cement consumption has increased 30 per cent YoY to 8.71Mt in June, according to the Construction Materials Department of the Ministry of Construction. Approximately 6.91Mt was sold domestically (up 29 percent YoY), while 1.8Mt was exported (up 35 per cent YoY).
Consumption in the country rose 25 per cent YoY in the Jan-June 2018 period, rising to 51.42Mt. Exports reached 15.42Mt in the six-month period, meeting 85.6 per cent of the target volume for the year.
Source: CEMNET

India’s FY19 cement output to rise 6% YoY: ICRA

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India’s FY19 cement output to rise 6% YoY: ICRA

10th july 2018

With a recovery in the affordable and rural housing markets and infrastructure construction picking up, India’s domestic credit rating agency ICRA expects cement production in India to rise by six per cent in FY19.
However, rising input costs will continue to dampen company profits.
Output from India’s cement plants reached 298Mt in FY18, a 6.3 per cent rise when compared with the 280Mt. The main share of this growth took place in the second half of the financial year as key markets registered a higher demand.
ICRA expects 19-22Mta of capacity to be added in FY19, primarily in the eastern part of the country. While lower than in the previous financial year, the capacity growth, when combined with market demand, will result in utilisation levels to remain below 70 per cent over the next two years.
Source: CEMNET

Coal prices have remained strong but are set to decline

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Coal prices have remained strong but are set to decline

10th july 2018

Coal spot prices have been highly volatile in recent years, with an upward trend since recent lows in April 2018, National Australia Bank says in its latest Mineral & Energy outlook.
NAB further said, Hard coking coal prices rose above US$200 a tonne in mid- June (due to port and rail maintenance issues), while thermal coal prices pushed above US$110 a tonne (the highest level since early 2012). Spot prices for thermal coal may become increasingly important – given the breakdown of the traditional Japanese financial year contract mechanism, with Tohoku Electric Power Co pulling out of negotiations with miner Glencore (the two parties who negotiate the agreement).
According to NAB economists, Asia is the key region for seaborne coal demand – with China, India, Japan and South Korea accounting for almost 60% of global imports in 2017. The growth potential of the latter two is somewhat limited longer term (given the mature nature of their economies), while rapidly growing India is increasing its domestic supply, aiming to develop self-sufficiency in coal supply.
China’s coal import trends have been mixed in 2018. NAB noted that, in the first five months, imports of metallurgical coal fell sharply – down 25% to 22.6 million tonnes, while thermal coal imports rose by 20% to 97.4 million tonnes. In a large part the latter reflected a particularly cold winter (boosting demand across January through March) and poor availability of natural gas.
Short term supply issues have impacted coal markets in recent years – particularly hard coking coal exports from Queensland. A dispute between the privately owned rail operator and the Queensland Competition Authority regarding its regulated maximum allowable revenue between 2017 and 2021 could limit the state’s coal exports in coming years – adding some upside risk to our price forecasts, the report says.
Australia’s total coal exports have increased strongly in the first four months of 2018 – albeit this reflects the recovery from Tropical Cyclone Debbie that severely disrupted metallurgical coal exports in April 2017. Thermal coal volumes rose by 0.8% yoy to 64.8 million tonnes, while metallurgical coal exports rose by 13% yoy to 55.6 million tonnes. That said, metallurgical coal exports remain well below the levels recorded in the first four months of 2014 through 2016.
Coal prices are expected to ease from current levels – as a softening China’s steel sector reduces coking coal demand and supply side concerns ease. We expect hard coking coal prices to average US$186 a tonne in 2018, a decrease of almost 15% (reflecting impact of supply shortfalls in 2017). In contrast, average thermal coal prices are forecast to increase by 12% to US$98 a tonne, the report says.
Source: NATIONAL AUSTRALIA BANK

China to cut coal use, curb steel in 2018-2020 pollution plan

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China to cut coal use, curb steel in 2018-2020 pollution plan

10th july 2018

China will cut coal consumption, boost electric vehicle sales and shut more outdated steel and coke capacity in the coming three years, the State Council said in a long-awaited 2018 to 2020 pollution action plan published on Tuesday.
China is in the fifth year of a “war on pollution” aimed at reversing the damage done to the country’s environment since the economy was opened up in 1978, with President Xi Jinping promising to use the full might of the Chinese Communist Party to meet the country’s goals.
The new 2018 to 2020 action plan, released on the country’s official government website, will expand the fight to 82 cities across China, and confirmed that the major coal-producing provinces of Shanxi and Shaanxi have been added to the list of “key” pollution control regions.
The new plan will also cover the heavily industrialised province of Henan in central China, as well as the Yangtze river delta, which includes the provinces of Anhui, Zhejiang, Jiangsu and the region around Shanghai.
The document said the regions of Beijing, Tianjin, Hebei, Shandong and Henan will be required to cut coal consumption by 10 percent over the 2016 to 2020 period, while the Yangtze delta region will have to cut coal use by 5 percent over the period.
It also said no new capacity for steel, coke and primary aluminium production will be allowed in the regions through to 2020, the State Council, or China’s cabinet, said. It will cap steel capacity in Hebei, the country’s largest steelmaking province, at 200 million tonnes by 2020, down from 286 million tonnes in 2013.
China will also take more action to tackle small-scale “scattered” pollution sources, and will work to cut off water, electricity and raw material supplies to firms that violate rules.
To meet its politically important smog targets in northern China last year, the government curbed traffic and coal use, and also imposed “one size fits all” restrictions on industries like steel, aluminium and cement throughout 28 northern cities from October 2017 to March this year.
The cabinet said special anti-smog measures would still be introduced over autumn and winter, but each of the 82 cities would now draw up its own bespoke plan. It also said it would raise gas storage capacity to ensure supplies were sufficient during winter.
The cabinet also set an annual production and sales target for new energy vehicles at around 2 million vehicles a year by 2020 in order to reduce road emissions.
Source: REUTERS

After missing 1st-quarter targets, Coal India is facing criticism yet again

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After missing 1st-quarter targets, Coal India is facing criticism yet again

10th july 2018

After missing its first-quarter targets, Coal India is facing criticism yet again as the country’s power plants continue to reel under coal stock shortage. This is even after the coal monolith stepped up production and sales dramatically on a year-on-year basis.
Company sources suggested that the prevalent 10-day coal stock with the power generators in the country against the 22-day stipulated norm is primarily owing to the hydel power sector missing its targets in the first quarter. In turn, to maintain power generation, there was increased pressure on the thermal power segment. This put serious pressure on Coal India.
During April-June, production in the coal-based power segment stood at 248453.54 million unit (mu), which exceeded the targeted production by 1.63 per cent but the hydro-power generators produced 30,510.24 mu, thereby missing the target by 6.54 per cent.
The Maharatna company produced 136.87 million tonne (mt) of coal during April-June this year, which is an increase of 15.2 per cent as compared to the output of 118.84 mt in the similar months of the last fiscal year. Nevertheless, it missed its output target for the given quarter by nine per cent.
On the other hand, coal supplies to power stations grew by 15.4 per cent at 122.84 mt which helped in bringing down the count of power stations having critical coal stocks from 30 (as on April 1, 2018) to 16 backed by an increase in rake loading.
As per company officials, the coal behemoth loaded 217.04 rakes per day on average to the power sector, during April-June 2018 as against 189.9 rakes loaded during the same period last year. The overall rake loading, comprising despatches to power as well as non-power sectors like steel, cement and others stood at 238.8 rakes a day recorded a growth of 9.1 per cent on a year-on-year basis.
Coal India officials are of the view that the shortage of coal in the power plants can be eased once hydel power production picks up in the country and are optimist on account of a good monsoon forecast.
Given the optimism around the monsoon, when coal stocks are poised to ease, the threat of overburden removal, however, haunts Coal India which is already down by over five per cent. Overburden removal refers to the process of removing the topsoil to expose the coal seams for extraction in an opencast mine.
The process becomes more cumbersome during the monsoons. In case Coal India is not ready with exposed coal seams, it cannot step-up production dramatically like it did in the previous year when shortage from renewable power sources, particularly hydel, suddenly led to a power crisis in the country.
So long, although coal stocks remain dismal in the thermal power plants, the country hasn’t yet faced a crisis.
Furthermore, company officials suggested that law and order problems, particularly in the Mahanadi Coalfields, Eastern Coalfields, Central Coalfields and Bharat Coking Coal mining areas are affecting production.
Sector analysts expect the power demand from coal based generators to increase by around five per cent this fiscal year, which wouldn’t be a problem for Coal India to cater to.
However, sources in the company view the targeted production of 610 mt to be “high” and “aspirational” and are of the view that the production growth registered in the first quarter is good and in line with its growth strategy.
In April this year, the coal ministry had appointed KPMG to conduct a study on coal requirements for 2020. Coal India officials expect that 1 billion tonne of the previously targeted production may not be relevant anymore and a revision of target is likely.
Source: BUSINESS STANDARD

Coal India Q1 production up by 15 percent to 137 million tonne

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Coal India Q1 production up by 15 percent to 137 million tonne

10th july 2018

Coal India Limited said it has registered a 15.2 % growth in coal production during the first quarter ended June 2018 to 136.87 million tonne while supply to power plants also jumped by 15.4 % to 122.84 million tonne. A senior official of Coal India said that “Clearly the focus is on higher coal output and increased supplies and there had been a consistent growth both in coal production and supplies to consumers during all the three months of the first quarter.”
While the offtake was spurred by higher rake loading, the overall coal offtake zoomed to 153.43 million tonne at the end of June, translating into a growth of 11.7 per cent.
Coal supplies to power stations stood at 122.84 million tonne during the quarter.
The number of power stations having critical stock has come down from 30 in April to 16 as on June-end, the company said.
The Company said that “Our aim is to shore up coal stocks at thermal power plants to the normative stock of 22 days requirement and see that the coal-fired power plants do not suffer for want of coal. We have also requested the thermal power plants to perk up their coal stocks, the official said.
Power sector accounted for 80 % of coal supplies during the period.
Coal India has been working with the Coal and Railways ministries for enhanced rake loading of 217.04 rakes per day on an average to the power sector during the first quarter of FY’19 against 189.9 rakes in the same period last year, registering a growth of 14.9 %.
The company produced 44.88 million tonne in June 2018, reflecting an increase of 5.20 million tonne in absolute terms over corresponding month of last year.
The company liquidated 16.56 MT of its pit head coal stock during the first three months of the current fiscal.
Source: THE ECONOMIC TIMES