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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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Tuesday, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
Friday, 04 November 22
CHINA EXPANDS COAL TERM CONTRACTS TO ALL MINES TO STABILIZE MARKET - REUTERS
China has expanded long-term thermal coal supply contracts for 2023 to all coal mines and asked power utilities to source more of their demand thro ...
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- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Australian Coal Association
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
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