Seeking Alpha

Chinese demand for coal is cooling

  • As if coal companies (KOL) don't face enough problems in the U.S., China's once seemingly unlimited appetite for coal appears to be cooling.
  • Economic growth in China is slowing, and rising public anger over air pollution is increasing pressure on utilities running the country's coal-burning power plants to shift to nuclear power and natural gas.
  • Compounding the issue for U.S. miners is that China's own coal industry is improving; China sits on trillions of tons of coal reserves, so domestic mines should meet most of the country's demand for thermal coal as long as prices remain low and transportation costs affordable.
  • There is already too much coal on the market, so China’s moves to cut down its “energy intensity” will hurt miners: ANR +0.8%, ACI -1.2%, WLT -0.1%, BTU +0.5%, CLD -0.6%, JRCC -1.4%, CNX -0.7%, RNO -1.2%.
Comments (13)
  • PeakOiler
    , contributor
    Comments (298) | Send Message
     
    Like duh, this is news? Diminishing demand in China has been talked about for the last three or four years!
    23 Sep 2013, 03:15 PM Reply Like
  • slash32is4
    , contributor
    Comments (137) | Send Message
     
    coal feels like banks a couple years ago... regulations, bad business environment... coal prices low/ interest rates low... everyone hates them... I guess this is the end for coal
    23 Sep 2013, 03:23 PM Reply Like
  • nemonemo
    , contributor
    Comments (323) | Send Message
     
    Morons at SeekingAlpha, you guys are worse than Wall Street crooks. Coal export reached all time high last week from Australian Ports. Yeah, coal is not needed.

     

    China problem is due to less distilled petroleum products and old cars.

     

    Electricity production is going at 4% to 10% per month in China.
    23 Sep 2013, 03:49 PM Reply Like
  • J 457
    , contributor
    Comments (951) | Send Message
     
    nem, totally agree, this "new story" is garbage. Let the stats speak for themselves which is all time high imports to China and India. The critics don't understand how expensive NG is to EU and China and Japan etc.. These countries are paying $12-$15 mmbtu for what sells for $3.60 in the US. Coal is much much less expensive. If the global economy tanks, coal will be more widely used because its cheaper. If the global economy accelerates coal will become more widely used as manufacturing increases. Either way, coal here to stay. And the comment about China's own coal industry improving is also pure drivel...
    23 Sep 2013, 04:28 PM Reply Like
  • nemonemo
    , contributor
    Comments (323) | Send Message
     
    And BTW, coal usage in Europe reaching 30 year high. Please give a negative spin to it as well.
    23 Sep 2013, 03:51 PM Reply Like
  • wil3714
    , contributor
    Comments (1951) | Send Message
     
    Can you source this?

     

    I too agree with most of what people are saying and also China isnt going to move to nuclear based on what happened in Fukushima and all there issues that are still complying.
    23 Sep 2013, 11:10 PM Reply Like
  • Mike847
    , contributor
    Comments (64) | Send Message
     
    In a presentation to the Barclays CEO energy-power conference in New York last week, Peabody CEO Greg Boyce said annual global coal demand would grow from 7.7 billion tonnes in 2012 to almost 8.9 billion tonnes in 2017.

     

    He said growth in global steel production would require an additional 150 million tonnes of metallurgical coal in 2017, while new coal-fuelled generation of 425 gigawatts around the world would need an extra 1 billion-plus tonnes a year. More than 80 per cent of this projected growth would come from China and India.
    23 Sep 2013, 05:50 PM Reply Like
  • The Patriot
    , contributor
    Comments (324) | Send Message
     
    Much of the dirty coal China burns is lignite - brown coal. Very low quality and dirty. I look for lignite to be replaced with a higher quality cleaner burning coal.
    23 Sep 2013, 10:03 PM Reply Like
  • User 10924671
    , contributor
    Comment (1) | Send Message
     
    Where do you get your coal reserve figure of trillions of tons. China is a communist country and good data is hard to get, but they have reported 114.5 Billion tons of coal reserves each and every year since 1992, and have produced over 50 Billion tons during that same period.
    24 Sep 2013, 03:56 AM Reply Like
  • geodan85
    , contributor
    Comments (166) | Send Message
     
    I believe the trillions is a typo or just showing that this article is an attempt to attack coal stocks, again.

     

    The U.S. I believe has the largest coal reserves in the world, estimated at 483 billion short tons (link below).

     

    http://1.usa.gov/18mKUJi

     

    Also, Germany is burning more coal as they attempt to move away from nuclear power after the Japanese disaster. I believe their coal consumption will not be replaced that quickly (if at all) since their natgas supply is almost exclusively from Russia and always a problem with regard to price and politics.
    24 Sep 2013, 09:05 AM Reply Like
  • slash32is4
    , contributor
    Comments (137) | Send Message
     
    guys its all over for coal - Al Gore the guy that invented the internet and found man bear pig will soon stop the use of coal with the help of Obama to prevent global warming...
    24 Sep 2013, 10:51 AM Reply Like
  • nemonemo
    , contributor
    Comments (323) | Send Message
     
    oh wait, it was global cooling that al gore invented
    24 Sep 2013, 11:09 AM Reply Like
  • freeman8201
    , contributor
    Comments (624) | Send Message
     
    Most of arch's coal export go towards europe folks.
    24 Sep 2013, 02:15 PM Reply Like
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