In Focus Jan 2016

7/25/2019 In Focus Jan 2016

1/18

Argus Seaborne Thermal Coal Outlook

In Focus

Special Edition

January 2016

illuminating the marketsCoal

January 7 - Top 5 for 2015

Key factors to watch in the calendar year.

February 4 - What if

Scenario analysis covering the base and bear case for

prices.

March 6 - Indian Supply and Demand review

Import balance in context of domestic demand and supply.

April 7 - Glencore supply cutsSegmentation of thermal coal prices.

May 6 - European demand and supply risks

A country-by-country view of demand risks and potential

supply.

June 3 - Changing shape of swaps curves

Examining the dramatic shift to backwardation in swaps.

July 7 - A closer look at Chinese inventory data

Review of the most useful and timely data points.

August 5 - US Coal market review

State of US domestic and export supply.

September 2 - Revisiting Indian demand and supply

Updating our assumptions in light of weaker than

expected coal-burn.

October 5 - Prospects for Chinese exportsLooking at the prospect of a large-scale return of Chinese

seaborne supply.

November 6 - 5 year outlook for demand and supply

Review of the longer term outlook.

December 3 - Stock check

Review of visible inventory at key demand points.

In FocusIn each monthly publication of the Argus Seaborne Thermal Coal Outlook, we present a more in depth research piecebeyond the regular review and analysis of price forecasts, demand and supply.

The Seaborne Thermal Coal market continues to evolve, with each month bringing additional analytical challenges.

Regulatory changes, shifting domestic demand and supply balances, strategic moves by producers and large shifts in

swaps markets have all been factors that have affected the outlook for coal prices, which extends beyond the connes

of estimating and forecasting imports and exports of coal.

Below is a short summary of the topics tackled in 2015, with the highlighted reports attached to this document. For

any questions on this research or the Argus Seaborne Thermal Coal Outlook, please contact Hayden Atkins at

[email protected].

7/25/2019 In Focus Jan 2016

2/18

Argus Seaborne Thermal Coal Outlook| In Focus Special Edition January 2016 | 2

Copyright 2016 Argus Media group

May in focusBalancing the demand and supply risks in Europe

Risks to supply Atlantic markets have emerged in Colombia and Russia, as coal movement has been restricted. But this has come

following strong growth in Q1, with demand in several key markets appearing more vulnerable heading into summer.

The European demand and supply picture for imported

thermal coal is mixed, with new threats to both demand

and supply emerging in the last month. On balance, the

presence of high levels of inventory should mean that cif

ARA prices struggle against other benchmarks.

Cif ARA prices have recovered substantially from the low

point in early January, although are still 18pc below levels

seen at the end of November 2014. Some of this movementappears to be due to shifts in oil and FX markets, although

this inuence has waned.

The chart below shows rolling 20-day correlations between

cif ARA prices, Brent crude and the Euro, with a level of

1 indicating perfect positive correlation and -1 perfect

negative correlation.

After being highly correlated in December and January, the

FX and oil movements have not correlated with European coal

prices. Rather, fundamental demand and supply factors appear

to be playing a much more important role.

Demand risks Turkish hydro generation undermines coal burn

European coal demand trends are not uniform in 2015, with

some countries posting gains in consumption and imports,

while others decline.

Turkey is expected to post substantial increases in coal

imports. In particular, higher utilization of imported coal

red generation capacity that was brought online in mid-

2014 would lead to higher imports for 2015. Steam coal

400

500

600

700

800

900

400

500

600

700

800

900

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2015 2014

source: TEIAS, Argus

Turkey import-coal power generation GWh

Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15

-1.0

-0.5

0.0

0.5

1.0

-1.0

-0.5

0.0

0.5

1.0

cif ARA and Brent Crude cif ARA and Euro

Source: Argus

Price correlations

imports in the year to February are around 0.5mn t higher

than the same period in 2014.

For the start of the year, this was the case, with generation

from import-based coal plants rising by 27pc in the rst

quarter. But as the chart above shows, generation has

crashed in April to be ~1pc higher than last year.

This decline in coal-red generation has been a massivesurge in hydro generation since the start of the year. April

2015 was double the level seen in April 2014. Power demand

has also been slow, with total power generation rising 1.2pc

over the same period.

With sluggish industrial activity also affecting demand from

cement makers and other industrials, we have subsequently

reduced our import growth assumption from +5mn t to 3mn

t, with the risks to imports more balanced than previously

anticipated.

UK switch starts earlier

UK coal demand and imports were destined to decline in

2015. With inventories swelling in 2014 and a rise in the

UK Carbon support price on 1 April shifting generation

economics against coal.

Utilities have pushed for import deliveries prior to the

carbon price increase to avoid this additional cost in

Q1, but this interest is fading as the clean spark spreads

are now favoring gas generation over less-efcient coal

plants.

7/25/2019 In Focus Jan 2016

3/18



High-frequency data from the National Grid shows that

this switch in generation economics has seen CCGT

generation take share from coal during off-peak hours,

with a 6-7pc swing in generation share compared to April

2014. With total demand down 3pc, this has pushed coal

generation down 20pc YoY, and CCGT up 30pc.

Some of this weakness in coal demand will fall on

domestic production, although this is marginally higher in

the rst two months of the year. We currently forecast UK

imports to fall 9mn t , although the risk is that the decline

is greater than this.

German import strength suggests inventory gainOne of the more perplexing developments in 2014 European

coal markets was the strength of German imports against

the decline in coal burn.

Generation at hard-coal red power plants dropped 10pc

in 2014 as mild summer weather and favorable conditions

for renewables eroded total power generation and the need

for hard coal power. In the year to date, coal burn has been

at according to data from Fraunhofer ISE, with a surge

in offshore wind generation on new capacity additions

impacting the generation mix.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-20%

-15%

-10%

-5%

0%

5%

10%

15%

-10

-8

-6

-4

-2

0

2

4

6

8

Change in domestic sales (LHS)

Change in imports (LHS)

Growth in hard coal generation (RHS)

Source: VDKI, Argus

German imports, domestic sales and generation mn t, YoY

38 31

1723

0%

10%20%

30%

40%

50%

60%

70%

0%

10%20%

30%

40%

50%

60%

70%

Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15

CCGT Coal

Source: BM Reports, Argus

Off-peak coal and CCGT power generation share

Imports, on the other hand, have reported to be a little bit

higher in 2014, with seaborne exports accounting for the gains,

with railed coal from Poland and the Czech Republic fairly

stable. Sales from domestic mines were slight higher 7.6mn t.

So even though coal burn has so far proven to be on par

with the same period in 2014, there is an implied inventory

build that should lead to a decline in imports in 2015. While

the trajectory for coal-red generation for the rest of the

year is subject to the vagaries of the weather and renewables

availability, we are forecasting a decline of imports of ~6mn t.

Gains in coal consumption elsewhere

There are some regions were coal burn has been improving

and inventory has been declining. In Spain, stronger power

demand and a reduced requirement for domestic coal use has

seen an increase in import demand, with inventories starting

to fall. New coal red generation in the Netherlands should

further boost coal imports in the coming months, while coal

burn in France is rising from very low levels seen in 2014.

This will not be enough to offset the declines in coal-burn

seen elsewhere, with total European demand likely to fall

by 7-10mn t in 2015. But it is a reminder than the power

generation trends are not uniform across the region.

Emerging supply risks, but do they match the demand risks?

The recent stabilization in cif ARA prices has partly been

attributed to emerging supply issues in Colombia and Russia

in particular.

Supply trends into Europe shifted markedly over 2014. As

demand for imported coal in China capitulated and prices

fell, supply from Atlantic market producers that had made

its way into Pacic markets was now being pushed into

more traditional markets. This saw supply from South Africa

in particular expand by around 4.5mn t, even as demand

in the region fell. This had the effect of pushing US supply

out of Europe and the seaborne market all together, with

exports falling by a total of 15mn t in 2014.

The rst quarter of 2015 has seen competition for European

buyers intensify by an improvement in export availability from

Colombia, which was hampered by government enforced

outages this time last year as newer ports came online. While

exports from the US, South Africa and Russia to Europe have

dropped, supply from Colombia has risen by more than 4.5mn t.

7/25/2019 In Focus Jan 2016

4/18



The strong performance from Colombia is now likely to

slow due to limited railing on the Fenoco railway. This is

controlled by Drummond, Glencore and Goldman Sachs and

services the Cesar coal producing region, which accounts for

~45mn t of Colombias coal production.

The ban on railing at night on one portion of the track

has remained in place despite the efforts of shippers and

other parts of government to improve noise issues with

trains and overturn the ban. This has impacted shipments

too much in Q1, although stocks at some ports are now

low and shipments are being affected. Inventory levels at

Drummonds operations have dropped to very lowlevels

~0.3mn t, although inventory levels at Puerto Nuevo, which isoperated by Glencore have not been under as much pressure.

It is still not clear how long the Fenoco rail ban will last,

with the latest efforts to install noise reducing barriers

around tracks in areas where restrictions apply likely to

take around three months. This should see the gains in

Colombian exports expected in 2015 to be pared back to

+5mn t, although the impact of this ban is unlikely to be as

damaging to supply as the disruptions in Q1 2014.

There have been some other areas of supply concern. Some

South African producers have endured strikes, while a

landslide has affected the ability of some Russian mines to

move coal by rail.

But in aggregate, these supply disruptions do not appear

to be large against the backdrop of weaker demand

and high levels of inventory. Stocks at UK power plants

Implications

If cif ARA prices were priced purely on the demand and

supply balance in Europe alone, then we think that prices

would be likely to fall in the coming months. However,

seaborne thermal coal markets are interconnected. To be

sure, the swing in demand and supply in China, India and

Indonesia does dwarf the movements seen in Europe

and arbitrage prices in China have become increasinglyimportant over the past few years.

As laid out earlier in this report, we expect Chinese arbitrage

prices to improve as consumption picks up as the current

rate of destocking continues. An increase in China prices and

imports should help support most price benchmarks.

But this is a contrarian view, with most market participants

not expecting China to lead a rise in coal prices in

seaborne markets. To be sure, in the last month, a seasonal

slowdown in coal burn coupled with high inventory

through the supply chain in China has seen arbitrage prices

fall 10pc in April.

Even with a rise in Chinese arbitrage prices, we believe

that the differential between cif ARA and fob Richards Bay

(commonly known as implied freight), is likely to remain in

negative territory as seen at the end of April.

02

4

6

8

10

12

14

16

Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15

UK France Finland Spain ARA Stocks

+26%YoY

-15%YoY

-24%YoY

+26%YoY

Source: DECC, Eurostat, Argus

-1%YoY

Selected European coal stocks mn t12.7 12.1

10.014.6

6.05.75.04.5

0

5

10

15

20

25

30

35

4045

0

5

10

15

20

25

30

35

4045

1Q13 1Q14 1Q15 est

USA South Africa Colombia Russia

Source: GTIS, Argus

Steam coal exports to Europe mn t are particularly high in the context of falling demand,

while inventory at ARA ports and Richards Bay is also

relatively low. So these disruptions are unlikely to tighten

the balance of demand and supply of thermal coal into

Europe.

7/25/2019 In Focus Jan 2016

5/18



September in focusIndia S&D: pause in demand or structural change?

Demand for imports have waned in the last few months, with many pointing to the lift in production from Coal India as a struc-

tural change that has set imports on a downward trajectory. We think the weakness in power demand is equally as important

and something that can be reversed.

There has been a considerable shift in expectations for Indian

imports in the near and long-term in the past six months.

The previous expectation that Indian imports would grow

rapidly over the next few years has been challenged by the lift

in domestic coal production and the rise in inventory, which

has cooled the appetite for imports and weighed heavily on

prices out of Richards Bay in particular.

0

5

10

15

20

25

30

0

5

10

15

20

25

30

35

Jan 13 Jul 13 Jan 14 Jul 14 Dec 14 Jun 15

Import, left Domestic, left Days of use, right

Source: CEA, Argus

India plant stocks mn t, days

2009 2010 2011 2012 2013 2014 2015

-20%

-10%

0%

10%

20%

30%

-20%

-10%

0%

10%

20%

30%

Total Coal Nuclear and Hydro

Source: CEA, Argus

Power demand weakness 3mma

55%

58%

61%

64%

67%

70%

73%

55%

58%

61%

64%

67%

70%

73%

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

FY 15 FY 16 FY 14

Source: CEA, Argus

PLF coal and lignite plants %

The most widely followed measure of inventory is the

daily stock data at 100 plants from around India, which is

shown in the chart above. This has soared in terms of tons

and days of use compared to August last year, although

the stabilization in the level of inventory at around 30mn

t suggests days of use should fall back towards 20 days as

coal burn rises on seasonality in Q4.

The composition of this inventory data is more

representative of the state sector than the central and

private sector generation. Total coal generation covered by

the survey is 75pc of total capacity, with close to 100pc ofstate sector covered, while the central and private sector

generation is 80pc and 43pc, respectively.

This composition may mean that the oversupply of coal is

somewhat overstated by this data, as plants covered do

not include any large plants dedicated to imports, while

generation from the state sector has been considerably

weaker than elsewhere. Private sector thermal generation

has risen by 14.2pc in the year to date, while the state sector

has fallen 2pc

Weakness in power demand a heavy weight

The weakness in coal burn and broader electricity

generation is a surprise relative to expectations at start of

the year. Total power generation grew by 3.3pc in the year to

July, which is much slower than the 9.4pc growth recorded

in the same period last year.

Coal power has also been displaced by stronger nuclearand hydro generation. Hydro generation growth has been

relatively modest compared to some years, rising by around

7pc year-on-year in July and August. Nuclear generation

was strong earlier in the year but has slowed in the last few

months as well.

India has also added signicant coal red capacity over the

past 12 months, which means that plant load factors (PLFs)

are now low. Given few power plants have issues obtaining

coal, this speaks to the weakness in power demand, which

is a different problem that coal-generators have faced

compared to the last few years.

7/25/2019 In Focus Jan 2016

6/18



Another indicator of this weakness is the low levels of

day-ahead merchant power prices. This only represents a

small proportion of power produced and consumed, but is

indicative of marginal demand for power.

The chart below shows prices and volumes for the day-

ahead market on the Indian Energy Exchange (IEX). In

August, prices averaged 2.73 Rs/KWh, which is down 40pc

from the 4.5Rs/KWh seen in August 2014.

0

1

2

3

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014 2015

Volume Twh, right C learing price Rs/ Kwh, left

Source: IEX, Ar us

IEX day ahead prices

2007 2008 2009 2010 2011 2012 2013 2014 2015

48

50

52

54

56

58

-5%

0%

5%

10%

15%

20%Cement product ion 3mma, left PMI, right

Source: HSBC, MOSPI, Argus

Industry demand cement mn t

2

3

4

5

6

7

8

2

3

4

5

6

7

8


FY14-15 FY13-14 FY15-16

Source: CIL, Argus

Production, captive coal blocks mn t

30

40

50

60

70

30

40

50

60

70


FY14-15 FY13-14 FY12-13 FY15-16

Source: CIL, Argus

India pithead stocks mn t

Like power, demand for coal from industry has also been

relatively slow. Sponge iron and cement production have

been growing, albeit at fairly subdued rates as industrial

activity has generally been slower than expected.

Domestic supply lift, although tests ahead for logistics.

AS demand growth has slowed considerably, domestic

production and delivery of coal has improved following

years of stagnation. This growth has been below target, but

the 8.2pc growth in Coal India (CIL) production in the year-

to-date is much fast than the 2.5pc growth experienced in

the past few years.

One area that gathered a lot of attention at the start of

the year and has lost production momentum is captive

coal blocks output. While this is only a small portion

of production, it has declined almost 18pc in the year

so far and is one area touted for strong growth in the

years ahead. This highlights that despite the impressive

gains made by CIL there are still challenges ahead on the

production front.

Delivery of coal has also grown in the last year, although this

has been at a slower pace than production. Total dispatch

of coal is estimated to have growth at 5pc in the rst half of

2015, with CIL performing a little better, rising 6pc.

The slower growth in dispatch has meant that the trend of

falling pithead stocks has reversed since the start of the year

by 7.5mn t or around 4 days of supply. This perhaps speaks

to some of the logistical challenges in domestic production

displacing imported supply. Consumers that have coal

linkages are likely to take domestic coal over imports given

the relative cost, so the rise in pithead inventory is unlikely to

be a function of the slower growth in downstream demand.

7/25/2019 In Focus Jan 2016

7/18



Start of a structural trend?

We last published our demand and supply forecasts for

India in March, with the expectation that inventory would

be largely neutral as demand growth absorbed growth in

domestic and imported supply.

The biggest miss in terms of our forecasts was the rate of

growth in demand, which we expected to be closer to 6.4pc

in the current nancial year. Our expectations for supply have

broadly reected the current trends, with the difference the

change increase in inventory over the past 6 months.

We were already forecasting lower growth in imports,

particularly as import-dedicated coal plants reach peak.

Power generation from these plants has been roughly at in

the year to date.

5

5.5

6

6.5

7

7.5

8

5

5.5

6

6.5

7

7.5

8

De c Jan Feb Mar Apr May Jun Jul Aug Sep O ct Nov

2014 2015 2013

Source: CEA, Argus

flat YTD

Import-based coal plant generation TWh

45

50

55

60

65

3

4

5

6

7

8

9

10

11

12

2012 2013 2014 2015

CPI, left RBI rate, left Indian Rs/US$, right

Source: RBI, MOSPI, Ar us

India ination, FX and interest rates pc, Rupees

If the recent performance of coal-burn versus supply was to

be the new trend, then the outlook for imported coal demand

would be poor. But we think that recent weakness in coal-red

generation is unlikely to be sustained in the medium term.

While it appears the Modi government has had some

success in boosting domestic coal supply, a much more

pressing issue now is slow growth in power consumption.

Part of this is likely to be macroeconomic, with the euphoria

brought by the new government last year now fading away.

But there is still plenty of policy repower that can be used

to boost the economy, with interest rates still relatively high

and ination low, while the budget balance has improved.

Below are our expectations of demand, supply and imports

over the next two nancial years (March year-end). While we

expect import growth to slow from the heady rates seen in

the last year or so, we think imports are unlikely to fall on a

full-year basis. The key variable in our perspective is not the

growth in domestic supply, but coal-burn regaining some of

its lost momentum.

India coal demand and supply

2013-14 2014-15 2015-16 2016-17

Supply

Domestic supply 565 612 650 692

Imports 163 216 231 243

Thermal 128 170 183 192

Met coal 36 46 48 51

Total supply 728 828 881 935

Demand

Power plants 572 646 683 739

Import coal only 37 41 43 44

Domestic coal linkage 535 605 640 695

Other 162 182 182 190

Total demand 734 827 865 929

Reported change in stock -6 0 16 6

Source: Ministry of Coal, Argus

Implications

The dynamics of the seaborne market have shifted

dramatically given the fall in Chinese imports and the

subsequent cuts in exports in some parts of the world.

Steady growth in Indian exports is supportive of a tighter

market balance in the absence of supply growth and stable

Chinese imports/arbitrage prices.

7/25/2019 In Focus Jan 2016

8/18



October in focusChinese coal exports: next threat to seaborne markets?

The drop in Chinese coal consumption and the prospect of a depreciating Chinese yuan has increased the expectation of Chi-

nese exports returning to seaborne markets in the next few years. While we would expect Chinese exports to rise, understanding

the impact on prices is dependent on how China is incorporated in modelling the seaborne market and the fragmented nature

of key markets.

In some respects, the lack of Chinese thermal coal exports in

2015 has been a surprise, with 0.8mn t exported in the year

to August. This speaks to the competitiveness of Chinese

exports at current prices.

Chinas largest state-controlled producer Shenhua has

commented recently that they are aiming to reverse this

slide and expand their footprint in the Japanese market. But

many forecasters are wondering whether something more

structural is possible, with China potentially returning to a

net exporter of coal.

Chinas transition from net exporter to a huge thermal coal

importer was rapid. As the char t below shows, while net

thermal coal trade was shifting toward balance from 2004

to 2008, the tipping point for the explosion in imports

was the global nancial crisis in 2009. This period saw coal

demand and prices crash much more aggressively in globalmarkets than in China, with Chinese utilities using this

opportunity to buy cheaper imports on a large scale.

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

Jan 05 Jan 07 Jan 09 Jan 11 Jan 13 Jan 15

AUD USD

Source: FRED

Chinese yuan Yn

-10

-5

0

5

10

15

20

25

30

35

2004 2006 2008 2010 2012 2014

-10

-5

0

5

10

15

20

25

30

35Exports Imports Net exports

Source: China Customs

Chinese thermal coal trade mn t

0

1020

30

40

50

60

70

80

0

1020

30

40

50

60

70

80

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD

2015

Other Taiwan Korea Japan

Chinese coal exports mn t

Chinese seaborne supply was largely to the well-established

North Asia-Pacic markets of Japan, Korea and Taiwan.

Tonnages exported to these countries began to decline well

before 2009.

Policy shift

The shift to a net importer of coal was, up until recently,

supported by government policy through changes in

relative taxation of imports and exports. This, however, all

changed at the end of 2014 as taxes and quality regulations

were place on imports and export taxes were lowered.

Perhaps more important than taxation changes was the

appreciated Chinese yuan against the dollar. For the last 10

years, this signicantly shifted the competitiveness of the

domestic coal sector versus imports.

The recent small depreciation of the yuan has raised

the prospect that some of this competitiveness versus

international markets may be restored over the next few

years. But it is important to recognize that while the yuan

may have weakened against the dollar, it is still incredibly

strong against other producer currencies like the Australian

dollar and the Indonesian rupee.

7/25/2019 In Focus Jan 2016

9/18



Interaction between Chinese and seaborne prices

The arbitrage between seaborne and Chinese marketshas been a focus of analysts and traders ever since 2009,

although the nature of this has changed as coal qualities

have become more fragmented. The ability and willingness

of Chinese buyers to blend various coals of different ash and

energy levels has opened up markets for different products

that were not signicant in the prior years.

There are two important points to recognize on the

interplay between Chinese and seaborne prices. First is that

a big change in net trade ows is not necessary for Chinese

prices to inuence seaborne markets and vice versa. Chinas

trade position did not change from 2006 to 2008, but the

tightness in the domestic market certainly contributed to

the spike in Newcastle prices, with Chinese supply not able

to ll the supply gap left by supply disruptions in Australia.

0

20

4060

80

100

120

140

160

180

200

0

20

4060

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

fob QHD 5500 kcal fob Newcastle 6000 kcalfob Indonesia 5500 kcal Newcastle 5500 kcal

Source: Argus

Coal prices $/t

Second is that while China has introduced a raft of policies

to support domestic producers a limit imports, there is

not sufcient evidence to suggest that these efforts have

radically altered interplay between Chinese and seaborne

prices. Regulators may take more action, but it is not clear

that this will be effective in driving a wedge between

Chinese and seaborne prices.

Understanding impact of Chinese exports

The impact of Chinese exports on seaborne markets is

straightforward if this is treated as an exogenous shock to

the seaborne market. An increase in supply in seaborne

markets will weigh on prices, all other things equal.

But the interplay between Chinese and seaborne markets is

much more nuanced than this, and this greatly complicated

how to incorporate Chinese supply and demand into the

seaborne market balance.

We attempt to do this by incorporating coastal China aspart of the seaborne market. This has the advantage of

reasonably good supply visibility by ships from Bohai Sea

ports and also benets from having some visibility on

inventory levels at ports and relevant power plants.

The drawback is that while coastal demand and supply

trends inuence the Bohai Sea price, it is not the only factor,

with demand in other regions and mine supply/inventory

trends also particularly important.

Under this framework, it is conceivable that Chinese exports

could have no impact on the market balance or prices.

Assuming the Chinese and seaborne markets are both in

balance at a given price point and China was to increase

exports by 5mn t , it would depress seaborne market prices,

but it would also reduce coastal China supply, supporting

domestic prices. The result would be that seaborne prices

would be signicantly lower than Chinese prices, which

would ultimately encourage imports to balance the

seaborne market.

While this a highly stylized example, it does highlight the

importance of considering the impact on Chinese coastalsupply and arbitrages when considering the the impact of

Chinese exports.

Exporting excess capacity?

In the example above, it was assumed that Chinese exports

would reduce domestic supply (in a balanced market).

But what if China was exporting excess capacity in an

oversupplied market instead?

Given the declines in Chinese consumption in 2015, it would

appear that there is ample spare capacity for exports atports. Chinese coastal shipments are likely to have fallen by

around 6.2pc in 2015, or about 40mn t. This is around the

level that China exported back in 2006/2007.

So Chinese producers could export signicant quantities

without affecting the domestic market balance, and this

may be desirable to help reduce costs. And while marginal

Chinese producers are not competitive at current prices,

there are low cost producers that could be competitive in

seaborne markets at current prices.

7/25/2019 In Focus Jan 2016

10/18



But would large Chinese exports only affect seaborne

market prices? We would argue that this would in Chinesecoastal markets as well. This is because competition

from imports into Chinese markets would intensify given

displaced supply from other countries.

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China Other Russia Indonesia Australia

Source: GTIS, Argus

Japan coal imports by source mn t

-5%

0%

5%

10%

15%

20%

25%

Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15

-5%

0%

5%

10%

15%

20%

25%

fob Indonesia 5,500 fob Indones ia 4,600 fob Newcastle 5,500

Energy-adjust price discounts

In this scenario, Chinese policymakers might intensify

their regulatory measures to restrict imports in order

create a bigger wedge between Chinese domestic and

international prices, but its unclear how effective that

will be

So for some low cost producers, it may make economic

sense to push into seaborne markets. But it is questionablewhether large scale exports are compatible with

policymakers aims of improving domestic market

oversupply.

Focusing on market segments

The analysis above focusses on demand, supply and price of coal

as it relates to the arbitrage into China. But coal markets have

become increasingly fragmented. While prices tend to move

together in a broad sense, there are pockets within the seaborne

market where Chinese exports may make sense without

disrupting Chinese arbitrage markets.

In particular the NEWC-spec market for coal has priced at an

increasing premium to other price benchmarks that are morereliant on Chinese demand. As the chart below shows, the

premium for Newcastle 6,000 coal over higher-ash Newcastle

5,500 coal, even though absolute prices have weakened.

The widening premium in this market appears to be a

function of limited supply growth in this market segment

and steady demand for this coal from Japan. This recent

settlement of the October annual contract by Japanese

utilities of $64/t, which is well over spot markets, is a

testament to this.

Australian supply has largely been responsible for llingthe void left by the withdrawal of Chinese supply, leaving

Japanese consumers increasingly exposed to a smaller

number of producers of specic brands of coal.

Returning to this segment of the coal markets would see

premiums for Newcastle 6,000 coal shrink rather than

undermine prices. But the magnitude of exports that would

be absorbed to achieve this is small. It is likely that this

process will take some time given the difculty of obtaining

a foothold in the Japanese market.

Implications

Given the experience of the year-to-date, we think it is

more likely that Chinese domestic supply is cut rather than

push into seaborne markets. Policymakers may try to boost

the relative competitiveness of exports through further

regulatory measure, although its not clear how effective this

will be

That said, Chinese producers are looking to get a foothold

into some segments that offer higher premiums, which

should see Chinese exports rise from very low levels at

present.

306

652

61

200

300

400

500

600

700

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Thermal coal exports Domestic shipments

Source: CCTD, Argus

-6.2pc

Chinese coastal shipments mn t

7/25/2019 In Focus Jan 2016

11/18



November in focusFive-year outlook

Chinese thermal coal demand has undergone a structural shift in the last few years, and this has dramatically affected seaborne

prices. While the expected supply reaction has happened at much lower prices than previously envisaged, supply is now being

rationalized. This sets the stage for the next ve years, with changes in demand and supply to be much more marginal than the

last seven years, although this can still create meaningful price volatility.

The decline in seaborne coal demand and prices in the past

two years has seen many assumptions about the longer

term outlook abandoned. This is partially a reaction to the

more recent path in prices, just like the upward revision to

long term prices during the boom in the proceeding seven

years. But there has also been unexpected structural change

in key aspects of the demand and supply balance.

While some changes are likely to be permanent, it is perhaps

too early to abandon other assumptions. There are also a

myriad of cyclical and temporary issues that are likely to be

affecting current spot prices. This means that spot prices

today may not be the best anchor for basing longer term

assumptions, as the experience of the last few years has shown.

China supply adjusting to structural shift in demand

It is clear that the Chinese economy has moved to a lower

growth path than previously envisaged just a few yearsago. This is more than the law of large numbers limiting

growth. It is clear that policymakers approach to managing

the economy has changed, with ination no longer the

limiting factor to supporting growth. Financial stability,

corruption and the environment have also become much

more important competing concerns, and this has had a large

impact on the outlook for the economy and specic sectors.

The push for alternative generation sources to coal has been

one factor driving the weakness in coal burn in 2015. This is

set to continue over the next ve years, although there are

some factors that may slow the high rates of growth seen in

the last few years.

First, the pipeline of new hydro generation projects hasdwindled as permitting has become much more onerous.

Hydrological conditions are a year-to-year proposition, but

if average rates of utilization are achieved then we should

see a slowdown in the rate of growth.

0

500

1,000

1,500

2,000

2,500

2012 2013 2014 2015E 2016F 2017F 2018F 2019F 2020F

Solar Wind Nuclear Hydro

Source: NDRC, Argus

CAGR: 8.2pc

Chinese power generation by type TWh

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

-2

0

2

4

6

8

10

12

14

16

-2

0

2

4

6

8

10

12

14

16 Inflation GDP

Oct 2011 forecast

Oct 2013 forecast

Oct 2015 forecast

Source: IMF, Argus

China GDP and infation % change

Nuclear generation growth should continue to be strong if

the current pipeline of projects remains on track. There is

more uncertainty about wind and solar generation, as the

efciency of existing units has been low, even if the capacity

build out has been incredibly rapid. Overall, we forecast

non-thermal generation to grow by 8.2pc over the next ve

years, which will be faster than power demand growth.

The trajectory for coal consumption from the power sector

will hinge on how much power demand is not met by

alternative sources. We think that power demand growth is

now on a lower growth path, although it still seems likely to

grow faster than rates observed in 2015.

7/25/2019 In Focus Jan 2016

12/18



As the chart below shows, power demand is currently weak

by virtue of low consumption from the industrial sector,which has been contracting all year. Services and household

consumption has risen at around 6pc.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0

20

40

60

80

100

120

140

160

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Coal production, left fob QHD 5,500, right cfr South China 5,500, right

Source: CCTD, Argus

Chinese coal production and prices Yn, %

2007 2009 2011 2013 2015 2017 2019

-0.15

-0.1

-0.05

0

0.05

0.1

0.15

0.2

0.25

0.3

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%Total Industrial

Source: CEC, ArgusSource: CEC, Argus

Total generation

forecast range

Chinese power consumption by sector 3mma

While energy demand from heavy industry is likely to

remain weak, we are projecting that it will be closer to at

rather than continuing recent declines. Even a modest

improvement in industrial activity would see power demand

growth lift given 40pc of the total is growing at reasonably

strong rates.

Other areas of consumption of coal like cement, fertilizer

and chemical production and heating are projected tobe relatively stable. Under these assumptions total coal

consumption would grow over the forecast horizon,

although this growth is fairly marginal 1-2pc growth. This is

within the limits of environmental goals that policymakers

are looking to achieve.

But while demand growth in the next ve years is tepid

compared to previous expectations, there are increasing

signs that current prices are too low to support even a

small amount of growth. Coal production statistics in China

are fairly ropey, but partial indicators like rail and coastalshipments have fallen sharply in the year-to-date. Total

inventory has also come down even though demand is

contracting.

There is a concern that Chinese producers could increase

supply to meet higher demand without higher prices given

excess capacity and the desire to improve productivity and

reduce costs. While low-cost producers like Shenhua are

likely to have the capacity to ramp up output fairly quickly,

it is not clear that more marginal producers would do the

same without a signal from prices.

Given that inventory is not particularly high from a days

of use perspective and that supply cuts began at prices

that were much higher than current prices, we think that

prices are likely to move higher from current levels before

production can or will respond.

These developments will drive Chinese domestic prices,

which should drive arbitrage prices into seaborne markets.

But what about the import demand? We continue to

believe that Chinese imports are best understood as

supply in the seaborne market that has not found a home

elsewhere. Chinese demand is much more price elastic

than other countries. New regulations and taxes have

made competing with domestic coal more difcult and

have led to some supply cuts in the seaborne market as

a result. But there is not a huge amount of evidence that

the efforts of policymakers have led to a paradigm shift inthe relationship between Chinese domestic and seaborne

market prices, which is only marginally driven by the level

of Chinese imports.

7/25/2019 In Focus Jan 2016

13/18



India supply strong, demand weakness temporary

Expectations for the longer-term outlook for Indian coal

imports has also shifted dramatically in the last year or so as

imports have dropped year-on-year in the last few months.

This change in view largely hinges on the recent and

forecast domestic production growth from Coal India, SCCL

and captive coal blocks.

We are forecasting for the improved rate of growth to

continue for the next few years, although we have more

conservative rates of growth toward 2020. In particular,

Coal India is planning for production to leap by 120mn t in

2017-18 in order to reach their goal of 1bn t by 2020. While

Coal India has proven it can grow at a quicker rate than thelast ve years, it is not readily apparent that such a leap is

likely.

The path of production from captive blocks is more

uncertain. After strong growth in the previous nancial

year, output has fallen and is weighing on total production

growth. Regulations hold the key to unlocking production

from these sources, although given the years of

underutilization, it is far from a forgone conclusion.

Demand has had an equally important part to play in

tipping imports into negative territory in the last few

months. Both coal-red and total generation growth was

underwhelming in the rst six months on the year, growing

at just 3-4pc/yr. This is well below potential for coal burn,

with utilization at coal plants dropping lower.

Will demand growth be weak in the longer run? There are

signs of a substantial turnaround in just the last few months,

with power generation rising and coal-burn rising to 10pc

growth rates as hydro generation has weakened.

Generation capacity is unlikely to be a limiting factor to

longer term growth, with the planned increase in the coal

generation eet still large even with a renewed emphasis

on renewables generation. While India has always had

ambitious targets to increase power generation, the success

rate of delivering new capacity has improved.

Power demand growth has a lot of potential given Indias

economic potential, but a limiting factor has been the poor

nancial state of state-owned companies distributing power.

Efforts have been made to improve this situation, with

recurring losses to be reduced via rising power tariffs and

a reduction in transmission and distribution losses, while

existing debts are being restructured with the assistance of

state governments and the Reserve Bank of India.

We are assuming that generation from coal plants that

are not built specically to use imported coal will grow

at a CAGR of 8.5pc over the next ve years. This is a little

faster than the previous ve years, although this was

supplemented by the ramp-up of operations at coastal

plants that now consume around 45mn t of coal.

With cement demand also forecast to grow at around 7pc,

we are estimating that thermal coal imports will grow even

with domestic supply growth lifting to an average of 7.2pc

over the next ve years. This should drive modest import

growth.

Developing markets ramp up in demand on track

While there is a widening range of views on the future of

Chinese and Indian imports demand, there seems to be a

consensus on the ramp-up in thermal coal demand and

imports from developing countries in ASEAN and other

countries like Turkey, Morocco and Egypt.

0

50

100

150

200

250

300

1997 2002 2007 2012 2017 2022

Source: CEA, Ar us

Coal-fred generation capacity GWh

401.2 415.9 431.3435.8 452.2 462.4

494.0530.044.5

50.451.3 52.2 53.2 50.5

50.5

55.0

44.049.3

50.4 51.351.0 52.9

67.053.0

300

350

400

450

500

550

600

650

700

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Captive coal blocks SCCL CIL

Source: MOC, Argus

India coal production mn t

7/25/2019 In Focus Jan 2016

14/18



Plans for new red power generation are driving these

gains, with new capacity added in Malaysia, Turkey and

Morocco in the last 12 months examples of achievement

of bringing new plants online. The recent increase in

Vietnamese imports appears to be more about taking

advantage of the lower cost of imports than the realization

of new capacity.

Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15

-10

0

10

20

30

40

50

-10

0

10

20

30

40

50With carbon support price Without carbon support price

Source: Argus

Coal more profitable

Gas more profitable

UK coal vs. gas spark spread /MWh

0

20

40

60

80

100

120

2009 2011 2013 2015 2017 2019

Thailand Philippines Vietnam Malaysia

Source: Argus

ASEAN import projections $/t

We are projecting ASEAN coal imports to rise by 38mn

t over the next ve years. While this is nothing like the

explosive growth seen in China in the ve years prior to

this year, it will still be critical in shaping the outlook given

current prices are causing a contraction in supply.

Growth in countries like Egypt and the UAE is likely to also

be a small positive over the forecast horizon, although more

meaningful increases to co-red capacity are expected to

occur beyond 2020.

Developed markets how big are carbon policy risks?

Coal-related policy has shifted in some key north Asia-Pa-

cic importing countries. Korea is still set to import substan-

tially more coal in the next ve years as new plants come

online. But there is increased debate about the role of coal

in the power generation mix in Japan and Taiwan in the con-

text of longer term commitments to reduce carbon emis-

sions. While this has not changed our projections for fairly

at demand in these countries, it will require monitoring.

The situation in Europe is vastly different, where the

policy push to reduce carbon emissions has been going

on for some time. UK coal imports in particular are falling

sharply as a result of carbon policy, with the hike in the

Carbon Support Price this year ensuring that natural gas

is displacing coal in the generation mix. More coal-red

generation is likely to close, with some of it surviving by

complying with IED regulations and receiving capacity

payments. But utilization of these plants is uncertain,

particular in light of the recent drop in global natural gas

prices.

The path to reducing coal burn on continental Europe has

been more difcult given the economics to switch to natural

gas has not been nearly as compelling. The loss of nuclear

power generation in Germany has also made displacing coal

more difcult, while coal burn in Spain and Portugal has

grown substantially this year has hydro generation has been

weak.

Capacity is being closed across the continent as severalplants opt out of IED compliance by 2020, with utilization

at these operations likely to be limited. Even with limited

output from these operations, there would be capacity

for higher coal consumption, but the ongoing growth in

renewables generation and the erosion of power demand

as efciency improves and economic growth remains slow

means that consumption is likely to edge lower.

The future of domestic supply of coal is a key consideration

for the future of imports, with several mines in the UK, Spain

and Germany unlikely to be operating by 2020.

We are forecasting European coal imports to fall to 108mn

t by 2020 from close to 150mn t seen in 2012. In any

given year there is uncertainty about consumption given

the vagaries of renewables generation, but the trend in

consumption is clearly down.

Seaborne supply reaction to low prices becoming clear

After growing in the last few years despite falling prices,

the weakness in prices in 2015 has illuminated the point at

which pressure on margins leads to a reduction in seaborne

7/25/2019 In Focus Jan 2016

15/18



coal volumes. While this does not guarantee a price oor,

it does suggest that the risks to the market balance haveshifted if prices remain at or below current levels.

Indonesia and the US have been responsible for the decline

in exports as producers elsewhere have been stable or have

recorded small growth. The reduction in US exports has

been going on for a couple of years, as arbitrages to Asia-

Pacic and Europe have closed and contracts have rolled off.

65

70

75

80

85

65

70

75

80

85

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 2015 2013

-18mn t YTD

Note: Includes Australia, US, Canada, Russia, Colombia, China, South Africa, Indonesia

Source: GTIS, Argus

Seaborne coal supply mn t ann

Australian supply has proven to be much stickier given

large capital investments, less exible transport cost

arrangements and the buffer of a much lower Australian

dollar. Some of the growth in 2015 has been metallurgical

coal that has switched into thermal coal markets given the

weakness in steel demand.

We have not forecast any greeneld projects to come

online in Australia over the forecast horizon, with the

uncertainty about demand and prices, as well as the

regulatory environment likely to be a barrier to the large

investments required to make these projects viable.

There are expansions agged at by major producers

at browneld mines, which underpin our forecast ofAustralian exports reaching around 240 mn t in 2020. But it

is questionable how actively these will be pursued in light

of current prices.

Competition is set to remain erce in the Atlantic basin as

producers are still set to expand in the region as demand

wavers. The South African Rand, Colombian Peso and

Russian Ruble have all fallen dramatically in the last 12

months, which is keeping planned supply expansions in

play.

Colombia is still forecast to grow to over 100mn t in the

next few years, as both the Cerrejon and Drummond

expansions remain in play. The next big step up in South

African exports has proven elusive for a decade, although

we continue to assume South African shipments will reach

90mn t in the longer term. Russian producers are more

likely to expand into Pacic markets than into Atlantic

markets, although will continue to compete for market

share in growing markets like Turkey.

There are some pockets of gains, with Illinois Basin volumes

to Europe rising and some high-sulfur nothern Appalachian

coal exported to India in 2015. This should keep US thermal

coal exports stable over the forecast horizon.

Indonesian exports have fallen in 2015 after a decade of

explosive growth. The cuts to output have come across the

producer spectrum, with large listed producers like Adaro

reducing output, while small-scale miners with limited

balance sheets also falling by the wayside this year.

Indonesian producers perhaps have more exibility than

producers elsewhere given transportation to ports is lower-

cost and less capital intensive. The competitive contractor

landscape also means that Indonesian producers can react

more quickly to cash losses than peers elsewhere.

Given Indonesian producers rationalized output, how

quickly could it come back? We think large producers will

ramp up production quickly given they are running below

capacity and were planning output at much higher levels.

But it does seem unlikely that longer-term production targets

will be chased without an improvement in the outlook for

margins, which is more likely to hinge on prices moving higher.

Title unit

0255075

100125150175200225250275

2008 2009 2010 2011 2012 2013 2014 2015 Long

term

target?

Toba Bara PTBA KKGI Harum Berau ITMG Kideco Adaro Bumi

Source: Company reports, Argus

Listed Indonesian producers mn t

7/25/2019 In Focus Jan 2016

16/18



The lack of growth in Atlantic markets means that producers

will have to push into other markets. Incremental supply

from South Africa seems destined to India and other

Pacic markets, while part of the expansion in Colombia is

predicated on sending coal to Asia-Pacic via the expanded

Panama canal.

The uncertainty surrounding long-term demand prospects

may see this expansion projects put on hold, although we

are waiting for conrmation of this before making a change

to our demand and supply balance

Impact of exogenous variables on costs

The large depreciation in many currencies and fall in crude

oil prices has had a signicant impact on 2015 prices.

Both factors have affected the cost curves and has led to

producers accepting lower US dollar prices rather than

curtailing production. That said, we do not know whether

producers would have cut supply if the movements in

currencies and oil prices hadnt been so large, which would

have rebalanced coal markets at a higher dollar price.

50

60

70

80

90

100

110

50

60

70

80

90

100

110

Jun 14 Aug 14 Oct 14 Dec 14 Feb 15 Apr 15 Jun 15 Aug 15

Yuan Yen Euro

Indian Rupee Australian dollar Rouble

Rand Colombian Peso

Source: FRED, Argus

Various currencies vs the US dollar Index

0

20

40

60

80

100

120

140

0

20

40

60

80

100

120

140

Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16Source: Argus

Argus year ave

forecast

Ice Brent crude oil $/bl

0

50

100

150

200

250

300350

0

50

100

150

200

250

300350

2012 2013 2014 2015 2016 2017 2018 2019 2020

USEC and US Gulf ports Russia Western portsSouth Africa ColombiaAtlantic demand

Source: GTIS, Argus

Atlantic basin supply and demand mn t

Argusis not forecasting a substantial deterioration in the

crude oil price, with the consensus looking for a pick-up in

the longer term. But like we have seen in the coal market in

the past few years, there is substantial uncertainty about the

response of supply to lower commodity prices.

We think that demand is likely to grow, and the cost of

marginal supply should determine prices. With coal supply

shrinking in China, Indonesia and the US at current prices,

variables such as the Australian dollar and the Russian ruble

should only dene the relative winners at higher US dollar

prices.

But while this has affected costs and margins in 2015,

how persistent will the recent trends in these variables be

in the longer term? In some cases, it might make sense

for variables to be lower than previously expect over the

medium term, like the Russian ruble. For others, the case for

change to the longer term is not as clear. For example, has

the ve-year outlook for the Australian dollar really changed

that much in the last 12 months?

This is part of the challenge of pinning a view on prices

based on the cost curve. While some of the variables in the

cash cost equation are unlikely to move around, other parts

impacting the equation can move around dramatically and

are inuences that are exogenous to coal markets.

China arbitrage and net trade

We believe that the path for Chinese domestic prices should

help shape the outlook for seaborne prices over the long

term. The simple rationale for higher prices in China is that

we forecast a small amount of demand growth while supply

is shrinking.

The introduction of higher import taxes and regulations

on certain qualities of imported coal and the subsequent

decline in Chinese imports has led many to question the role

of China in inuencing seaborne prices in the longer term.

If imports were falling faster than Chinese demand due to

7/25/2019 In Focus Jan 2016

17/18



policymaker intervention, then would seaborne prices be

structurally weaker?

So far, the evidence is does not suggest this is the case.

Prices assessed cfr South China have been weaker than

QHD prices, although this was not unusual prior to the

introduction of policies at the end of 2014. If anything,

some price benchmarks have been surprisingly resilient. In

particular, fob Indonesia 5,500 kcal coal has priced at a small

premium to cfr South China prices over the past six months.

Fob Newcastle 5,500 coal prices have also been consistent

as a netback to cfr South China prices, even though this

40

50

60

70

80

90

100

110

120

40

50

60

70

80

90

100

110

120

Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15

cfr South China 5,500 fob Indonesia 5,500

fob Newcastle 5,500 fob QHD 5,500 ex VAT

Newcastle 6,000

Source: Argus

Coal prices $/t

-10

-5

0

5

10

15

20

25

30

35

2004 2006 2008 2010 2012 2014

-10

-5

0

5

10

15

20

25

30

35Exports Imports Net exports

Source: China Customs

Chinese thermal coal imports and exports mn t

coal was most heavily affected by Chinese regulations.

While volumes of Chinese imports of this coal havefallen, the price has not been at a widening discount

to assessments on China prices despite the additional

hurdles.

So we continue to base our longer term price forecasts

with the Chinese arbitrage price as an anchor point. This

means that the Chinese Yuan plays a particularly important

role from an FX standpoint. We are assuming a small

depreciation in the Yuan over the longer run of around 5pc,

although this should not be a barrier to the higher dollar

prices we are currently forecasting.

7/25/2019 In Focus Jan 2016

18/18

Argus Seaborne Thermal Coal Outlook | In Focus Special Edition January 2016 | 18


Registered ofce

Argus House, 175 St John St, London, EC1V 4LW

Tel: +44 20 7780 4200 Fax: +44 870 868 4338

email: [email protected]

ISSN: 2057-6692

Copyright notice

Copyright 2016 Argus Media Ltd. All rights reserved.

All intellectual property rights in this publication and

the information published herein are the exclusive

property of Argus and/or its licensors and may only be

used under licence from Argus. Without limiting the

foregoing, by reading this publication you agree that

you will not copy or reproduce any part of its contents

(including, but not limited to, single prices or any other

individual items of data) in any form or for any purpose

whatsoever without the prior written consent of Argus.

Publisher:Adrian Binks

Chief executive:Neil Bradford

CEO Americas:Euan Craik

Global compliance ofcer:Jeffrey Amos

SVP Consulting Services:Philip Shaw

SVP, Consulting Americas:Kristine Klavers

Senior Analyst:

Hayden AtkinsTel: +1 646 376 [email protected]

Trademark notice

ARGUS, ARGUS MEDIA, the ARGUS logo,

ARGUS SEABORNE THERMAL COAL

OUTLOOK, other ARGUS publication titles and

ARGUS index names are trademarks of Argus

Media Ltd. Visit www.argusmedia.com/trademarks

for more information.

Disclaimer

The data and other information published herein

(the Data) are provided on an as is basis. Argus

makes no warranties, express or implied, as to the

accuracy, adequacy, timeliness, or completeness of

the Data or tness for any particular purpose. Argus

shall not be liable for any loss or damage arising

from any partys reliance on the Data and disclaims

any and all liability related to or arising out of use of

the Data to the full extent permissible by law.

Customer support and salesTechnical [email protected]

All other [email protected]

London, UK Tel: +44 20 7780 4200

Astana, Kazakhstan Tel: +7 7172 54 04 60

Beijing, China Tel: + 86 10 6515 6512

Dubai Tel: +971 4434 5112

Moscow, Russia Tel: +7 495 933 7571

Rio de Janeiro, BrazilTel:+55 21 25 48 0817

Singapore Tel: +65 6496 9966

Tokyo, Japan Tel: +81 3 3561 1805

Houston, US Tel:+1 713 968 0 000

New York, US Tel: +1 646 376 6130

Argus Seaborne Thermal Coal Outlook is published by Argus Consulting Services, an independent division of Argus

Media group.

Argus Consulting Services

Drawing on Argus extensive knowledge of energy markets,

broad range of industry contracts and deep historical

databases, our consultancy division provides clients with

tailored analysis, detailed research and data to provide

market intelligence and competitive advantage.

illuminating the markets

Contact us at [email protected] more information.

To learn more, visit our websiteor contact your account representative.

argusmedia.com/direct

Argus directWeb |Mobile |Alerts

Argus Direct is the next generation platformfrom Argus Media. It is the premium way to

access our reports, prices, market insight,

fundamentals data and markets.

To learn more, visit our website

or contact your account representative.

In Focus Jan 2016

Documents

Transcript of In Focus Jan 2016