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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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Wednesday, 06 July 22
MARKET INSIGHT - INTERMODAL
Following the 3rd Decarbonizing Shipping Forum, held in Hamburg on June 2022, there has been a meaningful resurgence of discussions within the ship ...
Tuesday, 05 July 22
WHY ARE VLSFO PRICES SO HIGH, ESPECIALLY IN SINGAPORE? - STEVE CHRISTY, INTEGR8 FUELS
Tightness in products still trumps talks of recession
Last month we wrote about the fears of recession versus the tightness in product markets ...
Tuesday, 05 July 22
ADANI ENTERPRISES LOWEST BIDDER IN COAL INDIA'S IMPORT TENDER: REPORT - BUSINESS STANDARD
Coal India Ltd floated its first import tender on behalf of power companies, where Adani Enterprises Ltd came out to be the lowest bidder, a report ...
Tuesday, 05 July 22
CHINA POLICY KEY FOR IRON ORE OUTLOOK - ING
China’s covid lockdowns and recessionary risks hit iron ore
Iron ore prices have fallen significantly from their year-to-date high of US$ ...
Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
COALspot.com: Indonesian Coal Price Reference for July delivery drops 1.52 per cent month on month.
The Indonesian Coal Price Refere ...
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- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
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