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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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Monday, 19 September 22
BUMA AUSTRALIA AWARDED A$400 MILLION CONTRACT EXTENSION BY BMA FOR GOONYELLA PROJECT
Press Release – PT Delta Dunia Makmur Tbk. (the "Company") announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA ...
Saturday, 17 September 22
CHINA WARNS COAL COMPANIES AGAINST DUAL CONTRACTS, KEEP PRICES STABLE - REUTERS
China’s state economic planner warned coal companies operating at ports in the Bohai Bay region to comply with their long-term contracts to k ...
Saturday, 17 September 22
IS A GLOBAL RECESSION IMMINENT? - WORLD BANK
Since the beginning of the year, a rapid deterioration of growth prospects coupled with rising inflation and tightening financing conditions, has i ...
Saturday, 17 September 22
FITCH RATINGS REVISES GLOBAL METALS & MINING PRICE ASSUMPTIONS
Fitch Ratings has revised its metals and mining price assumptions reflecting evolving economic growth expectations and demand and supply dynamics.
...
Friday, 16 September 22
WHEN IS A VESSEL'S INCOME EARNING CAPACITY AT RISK? 'CONTROLLED INCOME CAN BE A KEY OF SUCCESS' - MARASCO MARINE
Managing marine risks is not an easy task, which requires special knowledge and expertise on the subject per se. Customarily, big ship management c ...
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- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
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