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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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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Australian Coal Association
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
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