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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 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
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