Sometimes Google Translate is good enough. A news item in Chinese from the blog of Polaris Power, a Chinese energy trade site (via Lauri Myllyvirta’s blog at Greenpeace East Asia, picked up by others). Reproduced without a cleanup I’m not competent to do.
Polaris-fired power news
This year, the national coal market oversupply problems have become increasingly prominent, inventory remains high, prices have fallen sharply, economic sectors continued to decline, to further expand the scale of loss, coal economic operation situation is more severe.
First, the basic situation of the national coal economy
(A) coal production and sales continued to decline. First half of the national coal output 1.816 billion tons, down 1.8%; where: June 298 million tons, down 2%. National sales of 1.727 billion tons of coal, down 2.1%; where June 284 million tons, down 2.3%.
(B) imports remain high. Imported 159.87 million tons of coal in the first half, up 0.9%; export 3.16 million tons, down 22.4%; net imports of 156.71 million tons, an increase of 2.37 million tons, an increase of 1.5%. After 2 to May this year, imports of consecutive monthly decline in June imported 25.05 million tons, an increase of 12%, an increase of 1.04 million tons. Points coals, the first 5 months of imports 30.67 million tons of lignite, an increase of 19.5%, coking coal imported 25.32 million tons, down 17.3%.
Increase (three) coal shipped. In the first half, the national railway shipped 1.15 billion tons of coal, an increase of 7.79 million tons, an increase of 0.7%, of which 185 million tons in June, an increase of 1.5 million tons, an increase of 0.8%. The main port of shipment shipped 339 million tons of coal, an increase of 7.3%, of which 57.25 million tons in June, an increase of 9.1%.
(Four) inventory remains high. To the end of June this year, the whole society has lasted 31 months inventory at 300 million tons or more. End of June, 99 million tons of coal inventory, the highest level; emphasis 79.06 million tons of stored coal power plants, available 23 days; major ports stored coal 52.64 million tons, an increase of 39% over the beginning. July 22 North Main sewer Qinhuangdao Port, Caofeidian, Jingtang, Tianjin and Huanghua Port five coal storage capacity of 24 million tons, an increase of 56% over the year, of which 7.4 million tons of stored coal in Qinhuangdao, Caofeidian 6.31 million tons, 2.3 million Huanghua t; main southern port of Guangzhou, Hong Kong stored coal unloading 3.25 million tons, 5.9 million tons of Fangchenggang.
(Five) prices dropped significantly. China coal price index was 142.4 on July 18, down 17.1 points, down 19.4 points over the beginning, down 80.4 points from its highest point (July 2008), a decline of 36%. 20 July 5500 kcal Qinhuangdao settlement price 490-500 yuan / ton, down 140 yuan / ton, compared with the beginning, down 85 yuan / ton; coking coal prices declined on average than the beginning of 200-250 yuan / ton, down 150 yuan / ton. National Coal prices have dropped to the end of 2007 levels.
(Six) efficiency of the sector continued to decline. Before five months, above-scale coal enterprises the main business income 1.21833 trillion yuan, down 6.6%; corporate profits 51.26 billion yuan, down 43.9%, compared with the same period in 2012 decreased 68.2%. Preliminary analysis, the current loss of coal enterprises have more than 70%. There are nine provinces there have been industry-wide losses; major coal-producing provinces in the 36 large coal enterprises, there are 20 business losses, nine enterprises in the profit and loss margins; more than 50% of companies cut wages, some companies there has been delayed, cut hair, wage arrears phenomenon.
(Vii) the decline in investment in fixed assets. First half of the coal mining industry 193.5 billion yuan in fixed assets investment, down 5.6%, and the “Eleventh Five-Year” annual growth rate of 26.7% compared to the drop of 32.3 percentage points.
It’s impossible that translation noise has reversed the meaning of this. The Chinese coal industry is in trouble. Production is down, but domestic demand has fallen more, falling short of production by 89 million tons in the half. Stocks are building up. Prices have fallen, and profits by even more. Some coal-miners are not being paid. The only major qualification is that coal imports still rose; but this can be explained by the lag in the unwinding of shipping contracts.
Could it be a temporary recession, or statistical blip? The Chinese economy as a whole grew at a fast clip, at an annual rate of 7.4%. This is slightly down from historic highs, but by no means a downturn. Some over-extended exporters may be feeling a chill, but you’d expect to see the consequences in financial results, not energy consumption. The China National Coal Association does not think it’s a blip, and is calling for more production cuts to restore margins (Greenpeace again).
The final way to discount this would be a conspiracy theory: the bearish news is a plant by a ring of bullish speculators like Marc Rich, who will clean up when the truth of rising demand comes out. If that’s so, we will find out soon enough. I don’t buy this far-fetched and evidence-free story. It would be too risky for the Chinese participants; they might even get shot. China has crony capitalism, not the casino version.
So it’s good news, if you are not a Chinese coal miner. (The only worse job is doing it without pay.) It looks very much as if Chinese coal consumption has peaked. Government officials were talking of a peak in 2017, but it’s come sooner than expected.
Why? Lauri Myllyvirta has a nice chart showing the large shift away from heavy industry over the last decade.
This means that the decline in Chinese coal is sure to continue. The mix of causes that produced it still operates: a shift in demand to energy-light services; widespread adoption in industry of better practices and new, efficient technologies; regulatory pressures from national and regional government; a rapidly growing fleet of renewable (and a few nuclear) generators – over 30 GW combined additions this year; and a resentful urban public still exposed to massive smog pollution.
3.5 billion tons a year is still an awful lot of coal, an unsustainable, climate-busting, lung-choking mountain. Others, including the Obama administration and the EU, should continue to press the Chinese leadership to press ahead and keep cutting. The difference now is that the Chinese no longer have a domestic reason to stall and reject emissions caps on principle.
If it’s confirmed, the peak in Chinese coal burning is the biggest and most encouraging news of the year. (I called the success of ACA in November last year, so I don’t have to choose).
I look forward to denialist Tony Abbott’s response when the news penetrates that Australian coal exports face early collapse.
nycster says
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"Others, including the Obama administration and the EU, should continue to press the Chinese leadership to press ahead and keep cutting. The difference now is that the Chinese no longer have a domestic reason to stall and reject emissions caps on principle."
The peak in Chinese coal use is indeed wonderful news. But do you really think the US, which emits more than twice (almost three times) as much CO2 as China per person, has any business pressing China about emission caps? I think you have no idea how ridiculous this looks. Like Saudi Arabia lecturing others on human rights.
Somehow the anglophone world seem to be living in a strange bubble where the rules are that you only talk about cuts or increases from the current level of emissions a country has, but never mention who is emitting how much per capita. Which is convenient because it us you to frame the problem in a way that grandfathers in the high emission levels of the US and (to a smaller extend) other Western countries. Now I hope that China will work to limit and reduce emissions, even if the US is unwilling to significantly reduce its much higher level of emissions. But it must be very tempting for them to give the middle finger instead.
Anyway, sorry if this comment is a little harsh. But we have a discourse here in the US on the international politics of climate change that is fundamentally defective, and this includes many otherwise reasonable voices from the liberal side. And as long as we have this biased frame dominating the discussion, the US public will never be ready to accept any deal that is remotely fair to other countries. Your post is not helping.
JamesWimberley says
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All diplomacy is tarred with hypocrisy, "vice's tribute to virtue". Would it be more effective if the delegation was made up of certifiably virtuous Bhutan, Costa Rica and Denmark? I suggest that the EU and USA have at least some moral standing here, in that they have actually reduced their carbon emissions, which China has not (yet). Trading brickbats on the lines of "you should do more too" would not be a useless conversation, as the accusation is true on both sides. It is also true that China – not the USA or EU – has been holding up a global emissions agreement for fear of putting growth at risk. Since the reason has apparently gone, this is a door worth pushing on.
This was a post on news from China. I’ve blogged enough here on climate for regular readers to know the charge of indifference to the responsibility of rich countries to be unfounded.