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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, 29 June 22
LNG MARKET REMAINS TIGHT - INTERMODAL
LNG market remains tight currently, mainly driven by the US LNG outage from the recent fire in Freeport LNG terminal together with the recent fall ...
Wednesday, 29 June 22
CHINA'S NEW PLAN FOR RENEWABLE ENERGY DEVELOPMENT FOCUSES ON CONSUMPTION - FITCH RATINGS
China’s focus on consumption penetration for renewable energy development in its recently released 14th five-year plan – 2021 to 2025 & ...
Wednesday, 29 June 22
APAC CORPORATE SECTOR OUTLOOKS SHIFT AMID GLOBAL SHOCKS - FITCH RATINGS’
Fitch Ratings’ mid-2022 corporate sector outlook review revealed that the Asia-Pacific (APAC) region saw the largest number of sector outlook ...
Thursday, 16 June 22
MARKET INSIGHT - INTERMODAL
Picking up from my last insight in March, on the early days of the invasion, it's worth pointing out the way that the fast-paced working enviro ...
Saturday, 11 June 22
AIMTEK INTERNATIONAL CONFERENCE AND AWARDS
Press Release: The prestigious AIMTEK International Conference and Awards concluded successfully on June 7th, 2022 at Radisson Blu, Yas Island Abu ...
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- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
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