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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, 22 July 22
MARKET INSIGHT - INTERMODAL
Faced with uncertainty regarding the most cost-efficient alternative fuels and the future dominant method to reduce their greenhouse emissions, man ...
Friday, 22 July 22
YANCOAL AUSTRALIA CUTS 2022 COAL OUTPUT VIEW AS FLOODS, COVID BITE - REUTERS
Coal miner Yancoal Australia Ltd YAL.AX cut its 2022 output forecast on Wednesday, signalling a hit from higher-than-expected rainfall, COVID-19-le ...
Wednesday, 20 July 22
BOOST FOR BIOFUELS AS IMO REMOVES REGULATORY HURDLE - GARD
MARPOL Annex VI regulations were written for petroleum derived fuels but also apply to biofuels. It has been a challenge to meet the regulatory req ...
Wednesday, 20 July 22
INDONESIA’S COAL EXPORTS TO THE EU INCREASED SIGNIFICANTLY RECENTLY
European countries have increased coal imports from Indonesia due to the energy crisis that hit the region after Russia cuts gas exports to Europe. ...
Tuesday, 19 July 22
DRY BULK MARKET: CAPESIZE MARKET FIRMS THIS WEEK - BALTIC EXCHANGE
Capesize
Firmer sentiment across both basins pushed the Capesize 5TC route average above the $20,000 threshold this week, closing at $24,209. A ...
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- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Economic Council, Georgia
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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