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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, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- White Energy Company Limited
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Planning Commission, India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- The University of Queensland
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
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