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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, 29 July 22
GLOBAL COAL DEMAND IS SET TO RETURN TO ITS ALL-TIME HIGH IN 2022 - IEA
The world’s consumption of coal is set to rise slightly in 2022, taking it back to the record level it reached nearly a decade ago, according ...
Thursday, 28 July 22
CREW FAMILIARISATION IS CRITICAL WHEN TAKING OVER A VESSEL - WEST P&I CLUB
Knowledge to Elevate
When a vessel changes ownership and/or manager, it can take some considerable time before the new crew and mana ...
Thursday, 28 July 22
RETURN OF COAL A THREAT TO EUROPEAN COMPANIES' ESG RATINGS - REUTERS
European companies turning to coal as an alternative to Russian gas face a hit to their environmental, social and governance ratings, leaving them ...
Wednesday, 27 July 22
MARKET INSIGHT - INTERMODAL
Amid the upcoming ban on Russian coal from the EU, which will be in full effect on August 10th, EU nations have been accelerating their coal import ...
Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
Though the price of oil has declined in recent weeks, it is still through the roof, filtering through to gasoline prices, and causing economic and ...
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- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Planning Commission, India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
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