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Wednesday, 07 December 22
MARKET INSIGHT - INTERMODAL
 China’s coal imports from January to October were 230.1m mt, a decrease of around 10.7% y-o-y (2021 totalled 323.2m mt). The question is if this negative momentum will remain in 2023, pressuring the Dry Baltic index. While the easing of Chinese Covid strict policies which coupled with the 70% coal reliance of North China for its heating boiler amidst the upcoming colder winter can trigger a demand boost for coal, we will focus on some adverse fundamentals which point to pessimistic expectations for its 2023 seaborne coal imports.
Domestic coal output on a rise.
Chinese total coal output of 4.12 billion mt in 2021 contributed around 92% of its total consumptions with 2021 imports standing at 323 million mt. In 2022, domestic production during the first three quarters stood 3.32 billion mt, an increase of +14% compared to 2021 first 3 quarters while the 2022 October output of 370m mt is up by +13m mt compared to October 2021 output. While coal represents almost 55% of China’s energy consumption and half of coal plant expansions (+197GW) are attributed to China, a growth of around 27% of its domestic coal mining capacity could cover this increase in demand. Indeed, 559m mt of coal mines are under construction and proposed as of January 2022 in China, representing 29% of the global share followed by Australia, India, and Russia. In the short-term, a shift in local production is strengthened by policymakers' decision to support national foreign reserves while the appreciation of US$ is leading to higher coal prices for Chinese power plants thus diminishing their profit margin. In addition to that, amidst the current geopolitical tension and its effect on global trade with increases materializing across all the energy commodities globally, we believe that China will keep focusing on its national power security by keeping its inventory levels high through its local production. Indeed, current levels standing at 326.7 million mt as of the end of September which is +45% above the historical average of 225m mt and +217m mt compared to the same period last year. Covid-zero Policy will determine the growth of coal demand which however remains subdued. While Covid-19 policy relaxation has begun we do not expect that a full re-opening will take place no earlier than the end of Q12023 further trimming its coal demand.
New trade patterns in question.
China's main source of coal is Indonesia with 133 million mt (98% thermal coal) being delivered so far in 2022, followed by Russia and Mongolia with 54.01m mt (68% thermal coal) and 22.38m mt (85% metallurgical coal) respectively. While Indonesia will remain the largest supplier of coal to China yet with a fall of -16.19% so far in the first ten months of 2022 compared to the same period in 2021, the rest two nations have significantly increased their market share with Mongolia and Russia posting an increase of +60% and +12.8% respectively. While ton-mile demand is benefited from cheaper Russian coal due to European sanctions and the need to alter its trade partners, an increase in Mongolian exports could absorb a share of Russian coking coal exports especially given the recent Russian transport infrastructure limitation which leads to delays in loading and arrivals. Having said that, the new Mongolian 233km Tavan Tolgoi rail line which is estimated to cut transport costs to around US$8 per tonne compared to truck transport costs, could point towards this shift. According to the president of Mongolia, this new rail line could increase coal exports to China to 50m tonnes compared to 22.38 million so far in 2022 and its record 36.24 million tonnes in 2018. In addition to this shift, other seaborne sources of metallurgical coal namely the US, Indonesia, and Canada could see their exports further decreasing from Mongolian ones. As far as the Mongolian thermal coal exports are concerned, an increase of 61% (+1.23 million mt) has materialized during the first ten months of 2022 compared to the whole of 2021. With rail infrastructure expansions, Mongolian thermal coal exports could also increase further. The real question is, does China needs all this coal? If not, based on this year's demand, decisions will be made based on costs and transport delays and in that scenario, Mongolian exports could benefit further.
By Yiannis Parganas,
Head of Research Department
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
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