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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, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
COALspot.com: Indonesian Coal Price Reference up around 2.17% in March 2023.
According to the new HBA regulation No. 41.K/MB.0 ...
Saturday, 11 March 23
MARKET INSIGHT - INTERMODAL
Uncertainty over the recovery of Chinese demand, demand destruction in Europe, as well as weather conditions will pivot the LNG market this summer. ...
Wednesday, 08 March 23
INDONESIAN COAL REFERENCE PRICE FORMULA HAS OFFICIALLY CHANGED
Indonesian Minister of Energy and Mineral Resources has officially changed the guideline for determining the benchmark price for the sale of coal c ...
Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Planning Commission, India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
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