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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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Friday, 23 September 22
EUROPEAN STEEL BUYERS SEEK DIRECTION IN VOLATILE MARKET - MEPS INTERNATIONAL
Demand for steel is slow to recover, after the summer break. Mill production costs continue to increase. Steel purchasers are uncertain about the f ...
Friday, 23 September 22
BUOYANT COAL INDUSTRY SEEKS WAYS TO STAY IN THE LONG-TERM ENERGY MIX - REUTERS
There’s no doubt that the global coal industry has been a major beneficiary of Russia’s invasion of Ukraine and the subsequent energy c ...
Friday, 23 September 22
MARKET INSIGHT - INTERMODAL
In view of the forthcoming winter, Europe is trying to escape from its energy (oil & gas) dependency from Russia to ensure energy abundance eve ...
Tuesday, 20 September 22
CHINA'S DAILY COAL OUTPUT HITS 3-MONTH LOW IN AUGUST ON RAINS, COVID CURBS - REUTERS
China’s daily coal output in August slipped to a three-month low as some mines in its biggest coal mining regions reduced operations or even ...
Tuesday, 20 September 22
CHINA COAL OUTPUT UP 8.1 PCT IN AUGUST - XINHUA
China’s raw coal output posted stable expansion in August, official data showed.
The country produced 370 million tonnes of ra ...
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- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Australian Coal Association
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