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