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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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Sunday, 02 October 22
MISC STRENGTHENS ITS PARTNERSHIP WITH SEARIVER MARITIME
MISC Berhad (MISC) today announced that its subsidiaries Polaris LNG Three Pte. Ltd. and Polaris LNG Four Pte. Ltd. have secured long-term time cha ...
Thursday, 29 September 22
MARKET INSIGHT - INTERMODAL
This week, focus turns to the 38th APPEC Conference, where leading professionals from the global oil industry will discuss the future key drivers o ...
Thursday, 29 September 22
HIGH COAL PRICES REMAIN A CONCERN FOR DOMESTIC NON-FERROUS METAL COMPANIES - ICRA
According to ICRA on Monday, the high price of coal will have a negative effect on the profitability of domestic non-ferrous metal companies that m ...
Tuesday, 27 September 22
14% INCREASE IN EUROPEAN COAL DEMAND TO BE SHORT-TERM TREND - WOOD MACKENZIE
European seaborne thermal coal demand is projected to increase 14% or 12 million metric tonnes (Mt) this year to 98 Mt as it grapples with the curr ...
Friday, 23 September 22
CHINA DIGS DEEP TO RAISE COAL OUTPUT TO RECORD HIGH - REUTERS
China’s coal production has surged this year as the government seeks to improve energy security by reducing dependence on imports and amassin ...
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- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- White Energy Company Limited
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
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