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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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Thursday, 26 May 22
MARKET INSIGHT - INTERMODAL
The newbuilding market activity has been significantly positive from a dry bulk owner perspective during the first half of 2022. Indeed, the contra ...
Wednesday, 18 May 22
INDONESIAN COAL PRICE REFERENCE DROPPED 4.42% IN MAY
COALspot.com: Indonesian Coal Price Reference for May delivery drops 4.42 per cent month on month.
The Indonesian Coal Price Referen ...
Thursday, 12 May 22
MARKET INSIGHT - INTERMODAL
Almost through half of the year, the overall shipping market continues to show signs of healthiness, after plenty of festivities and holidays that ...
Wednesday, 27 April 22
EUROPEAN UNION'S LNG IMPORTS - BANCHERO COSTA
In 2021, the European Union (27) was the third largest seaborne importer of LNG in the world, with a 15.8% share.
It followed Mainla ...
Tuesday, 26 April 22
CHINA'S APPETITE FOR BAUXITE HITS NEW RECORD AS Q1 IMPORTS JUMP 15.4% Y/Y - BIMCO
Bauxite shipments arriving in China hit new record levels in the first quarter of 2022 and grew at an average annual rate of 12.8% between 2017 and ...
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- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
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