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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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Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- The University of Queensland
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Australian Coal Association
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
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