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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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- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Australian Coal Association
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
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