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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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Saturday, 25 March 23
COAL INDIA HAS STRONG CASE TO INCREASE PRICES, TALKS ON: CMD AGRAWAL - BUSINESS STANDARD
Coal India (CIL) Chairman and Managing Director Pramod Agrawal said on Monday there is a “strong case” for increasing coal prices, and ...
Saturday, 25 March 23
ASIAN CRUDE PALM OIL WATCH 1Q23 - FITCH RATINGS
Malaysian benchmark crude palm oil (CPO) spot prices have averaged around USD915 per tonne (t) so far in 1Q23, sharply lower than the average of ar ...
Saturday, 25 March 23
INDONESIA’S COAL EXPORT INCREASED BY 21.0% YOY TO 388.4 MLN T IN 2022 - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the f ...
Saturday, 25 March 23
GLOBAL LNG-ASIA SPOT PRICES SLIP AS WEAK NORTHERN DEMAND REMAINS - REUTERS
Asian spot prices of liquefied natural gas (LNG) declined this week, falling to a 21-month low, as weak demand in the northeast Asia region continu ...
Wednesday, 22 March 23
OIL PRICE FALL SPECULATIVE, TO HIT $140 BY YEAR-END -ANDURAND: REUTERS
The recent fall in oil prices due to banking jitters is speculative and oil will hit $140 a barrel by the end of the year, hedge fund manager Pierr ...
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- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Planning Commission, India
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
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