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