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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- MS Steel International - UAE
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- The University of Queensland
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
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