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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, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
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