– Focus on green production rather than expanding production in the direction of China’s coal development –
– It is possible to sufficiently achieve the demand for supply guarantee at the level of the central government –
Overview of the 16th Yulin International Coal & Advanced Energy & Chemical Industry Exhibition
The 2021th Yulin International Coal and Advanced Energy Chemical Industry Expo, held for 12 days from October 15 to 4, 16, is an exhibition of considerable significance held at this point in China's power shortage due to a coal shortage. . As a result, although the exhibition has been held continuously since 2005, 2021 has become an exhibition that has received special attention from domestic and foreign officials.
Geographical characteristics of Yulin: a world-class coal and magnesium production and processing base
According to the Hurun Wealth Report (胡潤財富報告), as of 2010 (the latest data is difficult to check), there were 1000 wealthy people with assets of 88 million yuan or more, of which 1 people had assets of 5 million yuan or more. According to the survey, there are about 5000 and 1 people with a net worth of 7000 million yuan or more, respectively, in Ordos (鄂爾多斯) and Yulin (楡林) in Shanbei, north of Shaanxi.
Among them, Yulin City has many so-called energy codes. The Sanbei region, where Yulin is located, boasts abundant energy reserves. The overall energy dependence of Yulin City is quite high as it is composed of 1,400nd):11 (5800nd):6.7 (1rd). Yulin City is very famous for its underground resource reserves and its processing industry, especially as a coal and magnesium production and processing base that is attracting global attention. As a result, Yulin has established itself as a representative city facing the double pitfalls of expanding coal production and controlling carbon emissions.
Exhibition point: Focus on green growth, coal shortage signals are difficult to confirm
At the opening ceremony of the exhibition, a total of three government officials delivered congratulatory speeches. They were respectively Deputy Mayor of Yulin City, Zhang Seong-li, Deputy Chief of CCPIT China CCPIT Yu Zhang Long, and Director of the Institute of Coal Research, respectively. Instead, we evaluated Yulin's technological level and efforts in the fields of green mining and green processing of coal for carbon emission control.
Deputy Mayor Jang Seong-ri Announced
The same was true of the exhibition site. Most of the companies participating in the exhibition emphasized the growth in technology such as automation, robotization and greening of coal mining, and were unable to confirm slogans such as 'I will do my best to guarantee the supply of sugar' or a sense of crisis about the shortage of coal.
Four representative companies showing their own 5G and automation technologies (Wineng Group, Sanshiz In Kerji, Oxide Meiye, and China Telecom)
Looking at the technology itself with a slight turn of attention, it was confirmed that the scale of investment in related industries and the speed of technological development are very large and rapid as it is an industry with a large economy. At present, China has entered the stage of actual use of unmanned mining, and not only mining but also job-seeking robots and fire-fighting robots that are used at points that require some manpower can be remotely controlled. Real-time management and supervision of the whole was also possible, but an on-site official informed that the illegal mining of rare earths could be controlled by using the related technology privately.
Concept map of unmanned mining (actual use)
Firefighting robot (left) and rescue robot (right)
Magnesium smelting and processing officials: Difficulty in production and supply
One of the main viewing points of KOTRA participating in this exhibition was the current status of magnesium companies. Yulin City is one of the largest magnesium smelting and processing centers in the world, and Fugu County, which boasts a significant economic scale in Yulin City, is the center of magnesium production and processing. Fugu County, which also participated in this exhibition on a large scale, exhibited magnesium produced in the county, processed products, and derivatives. Therefore, direct contact with company officials was not easy.
However, company Z, a magnesium processing company located in Suider Prefecture and exporting related products to Korea, the United States, Germany, and Japan, is controlling magnesium smelting due to carbon emission control, and is experiencing some difficulties in supplying products. replied that However, the current contract is not at a level that cannot satisfy the existing contract, and in relation to the delivery date, he said that the delivery date is being partially adjusted on the condition that the next delivery price is partially controlled. He added that it was a difficult situation.
On the other hand, a local distributor revealed that there was no special control by customs in the process of exporting the product, and gave an opinion that the main purpose of carbon emission control rather than price control seems to be the main purpose in judging on its own. However, a number of distributors (including raw materials other than magnesium) have expressed the opinion that they may try to delay the delivery contract for related products, which are expected to increase in price. .
Demonstrates active market entry efforts by import-export companies targeting coal special
In <International Commerce Association and Key Enterprise Promotion> held as a side event of this exhibition, a number of companies were introduced to participate in the Yulin City Project. The Chinese side usually consists of environmental treatment companies, but the Iranian advisor of the Xi'an Municipal Import and Export Association introduced Iran's coal and mineral resource reserves and conducted a promotion that seemed to target China's coal shortage. In fact, although there is no direct relationship with coal mining/processing, such as Zhejiang Province, it is confirmed that provinces/city that have reached a certain level of economy are actively importing coal.
Masad adviser explaining the state of Iran's coal mines
Implications: Our business needs to respond wisely to accelerating raw material prices
As mentioned above, it was difficult to confirm the signal of coal shortage within the exhibition, but judging from the opinions of many distribution companies and government officials contacted locally, the central government's instructions to expand coal mining have already reached the bottom. I was able to confirm that it had been reached. However, it is difficult for officials to see that the government-designated production target has increased significantly compared to the previous production, and it was an order given in a situation where the production level was already identified through various meetings and exchanges, and at the same time, control over carbon emissions was emphasized even in related instructions. In particular, when President Xi Jinping visited Yulin City on September 9, an insider commented that Yulin City's environmental protection and control efforts were highly evaluated. It is clear that the current coal shortage problem exists, but the central government At the level, it can be assumed that the focus is on environmental protection and carbon emission control rather than on expanding coal production and securing electricity.
However, apart from this, the continuous rise in raw material prices is a realistic problem that Korean companies should be concerned about. Local producers were expecting the current upward trend in raw material prices to continue for a while, and some were optimistic that market prices would rise. In particular, there have been forms such as delaying the contract date to induce price increases, or giving priority to government supply even though supply contracts with companies are made using this price increase as a weapon. Accordingly, Korean companies that are importing related raw materials from China also need to be careful in establishing related contracts and payment methods, and efforts such as diversifying production and supply lines are also required.
Source: Shaanxi Province CCPIT, Hurun Asset Report, KOTRA Xi'an Trade Center Data Comprehensive