China’s Coal Import Tonnages Expected to Plunge

China’s coal imports are predicted to slide significantly over coming months, as the looming import ban holds back the signing of new deals and domestic demand remains weak. McCloskey China Coal Report has more on what is driving down demand.
By: IHS Energy Publishing
 
BRISBANE, Australia - July 16, 2013 - PRLog -- The import ban, which first emerged at a government meeting in late April, is understood to have started to bite into import volumes in May, although the proposal was still in the process of amendment during May and June.

It is believed that much of the 5-6mt/month of low quality imports seen over the past few months, will come to a halt by July-August, by which time the ban is expected to come into force, although a slight easing of the terms of the ban now looks likely. Meanwhile, the take of met coal may also slow further after a significant price weakening in the domestic market between April-June, with no sign that the situation will improve anytime soon.

Imports in May fell to 27.57mt, down from 28.69mt in April but higher than the 26.17mt reported in May last year, according to figures from Chinese customs.

Steam coal arrivals came to 12.82mt, up slightly from 12.55mt in April and 11.42mt in May last year. Coking coal imports slid to 6.49mt, down from 6.95mt in April, but much higher than May 2012’s 3.87mt.

Anthracite imports dropped to 3.89mt from 3.99mt in the previous month, but were also higher than 3.13mt in May last year.

However, imports of lignite dropped more, with the tonnage at 4.37mt in May, down 0.83mt or 16.0%, from April’s 5.2mt, and much lower compared with 5.64mt in May last year.

Total imports from Indonesia, mainly low quality material, dropped to 10.13mt in May, from 12.04mt in April, although the level was similar to the 10.86mt for May 2012.

Indonesia remains the largest import source over the first five months, with the overall volume hitting 56.06mt, increasing 18.3% from the same period of last year. Lignite accounted for 24.97mt, up 23% year-on-year.

Australia was the second largest, selling 33.43mt into China in the first five months, up 11.01mt, or 49.1%, from 22.42mt over the same period last year. The country exported 6.94mt to China in May, up from 5.75mt in April. One third of the tonnage was coking coal, and the remaining two thirds was steam coal.

By contrast, imports from Mongolia experienced a drop off of 11.5% to 6.33mt in the first five months, while tonnages from Vietnam fell 7.8% to 6.87mt.

Market sources indicate that low-quality coals are still favoured by Chinese buyers, but suppliers in Indonesia have become more cautious in signing up deals because of the proposed ban, especially at a time of strong buying from India and tight supply due to weather interruptions.

This has seen prices for 3,800kc NAR Indonesian coals move up by $1/t in late June to $43.50/t FOB, although prices in China’s domestic market have returned to a downward trend, sources revealed.

Following China’s release of statistics for May in mid-June, global coal prices have mostly been declining. As a result, Chinese importers have increased takings of South African cargoes, which saw larger price falls due to the weakening of the Rand, lower demand from India and intensified competition by Colombian into Europe.

Bids for 6,000kc NAR products from South Africa declined to $86/t CFR, which compares to the earlier level of $91-92/t. For 5,500kc quality, prices from the country have dipped to around $80-81/t CFR. It is thought that this has triggered a new wave of price declines globally.

This article first appeared in McCloskey China Coal Report. The latest information on the Chinese coal industry can be found in the McCloskey China Coal Report which presents monthly updates on both the producer and consumer sides of the Chinese coal market.  With information on trade, transport and policy updates, the McCloskey China Coal Report provides comprehensive coverage for anyone dealing with the Chinese coal market. To compliment the monthly report, daily updates are also available via McCloskey China Coal Report Daily.

For more information or for a free trial subscription, please contact epi.coalinfo@ihs.com, call +61 7 3020 4000 or visit http://www.coalportal.com/.
End
Source:IHS Energy Publishing
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Tags:Coal, Mining, China, Import, Trade
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