China's coal imports soar as India's stumble in Jul

reuters.com Import & Export,  International 2017-08-04 08:38:00

China's imports of coal from the seaborne market surged again in July, providing a stark contrast to a fourth consecutive monthly decline for India, said Clyde Russell, one columnist with Reuters in an article on August 3.


It's possible that the market should be paying more attention to China's growing imports rather than India's downturn.


The different dynamics in the world's two largest importers of the polluting fuel are largely a reflection of juxtaposing domestic policies.


China is restricting domestic coal output and shutting inefficient mines, which, coupled with a decline in hydropower output, has boosted demand for imports.


India, which gave back the title of the world's top coal importer to China last year, has a stated policy of reducing coal imports to zero and is boosting domestic production and efficiency of distribution toward that end.


China's seaborne imports were 20.8 million tonnes in July, up sharply from 17.9 million in June, according to vessel-tracking and port data monitored by Thomson Reuters Supply Chain and Commodity Forecasts.


The July data may be slightly revised in coming days as cargoes that arrived in the last few days of the month are factored in, but this won't change the underlying message that China's imports are strong.


July will be the third month this year where seaborne imports have exceeded 20 million tonnes, taking the year-to-date total to 135.2 million tonnes, up 12% from the first seven months of 2016.


Looking at the breakdown of suppliers, and top exporter Australia has fared better than regional rival Indonesia, most likely because it is the major global shipper of coking coal used to make steel, while Indonesia concentrates on lower grade thermal coal.


China's imports from Australia were 8 million tonnes in July, taking the year-to-date total to 51.26 million, a gain of 15.3% over the same period in 2016.


Indonesia has supplied more to China, with 56.72 million tonnes in the first seven months, but this is only up 10.3% from the same period last year, or about two-thirds of Australia's increase.


While not a major supplier to China, it's worth noting that the United States has shipped 4.03 million tonnes in the January-July period, double the 1.96 million from the same period last year.


India's seaborne imports dropped 13.4% in the first seven months of the year to 105.36 million tonnes, with top supplier Indonesia dropping 9.7% to 47.29 million.


Australia saw its exports to India slip 11.2% to 23.66 million tonnes, with its bigger percentage decline most likely because higher prices and a longer sea voyage undercut its competitiveness against both Indonesian and other exporters.


India's imports from the United States actually increased, rising 16.8% in the January to July period to 6.23 million tonnes.


What the vessel-tracking data does show is that the gain in China's imports in the first seven months of 2017 of 13.6 million tonnes has not been enough to offset the decline of 16.3 million in India's seaborne purchases.


In some ways this makes the ongoing gain in thermal coal prices somewhat surprising, with the globalCOAL front-month Newcastle contract rising above $100/t this week, reaching a high of $102.5/t on August 1, its best level since December.


Part of the answer is likely that the rise in Chinese demand has largely been for higher grades of thermal coal, such as those most commonly loaded at Newcastle port in Australia, the world's largest export harbour for the fuel.


It's further likely that much of the reduction in India's imports have been for lower-quality Indonesian coal, which would struggle to find buyers elsewhere.


This makes watching China's imports key for the outlook for prices, since this appears to be driving the market more than India's slumping appetite for coal.


(Writing by Tammy Yang  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China 5th 100 Mt coal rail channel to start operation in 2019 2018-07-19

Shaanxi Coal and Chemical Industry Group will put China's fifth coal rail channel with shipment capacity above 100 million tonnes per annum into operation before end-2019, joining government's years-l

2 Rising hydropower generation will further crimp China's coal demand growth 2018-07-19

With demand softening recently, bearish sentiment ripples through China's thermal coal market. Among all factors involved, fast-growing hydropower can't be ignored. Hydro power generation

3 China Coal Daily Track (Jul 19) 2018-07-19

Thermal coal Domestic market Key production regions saw the prices slip further as a whole. In Shenmu county in Yulin city, Shaanxi province, coal prices decreased 5-15 yuan/t on J

4 CHN Energy's 150 Mt long-term coal contracts to sooth nerves of Chinese utilities 2018-07-19

China Energy Investment Corporation (CHN Energy) will sign 30 million tonnes of long-term thermal coal contracts with leading power firms during a national coal trade fair, which will last three ye

5 Shanxi Jun power output increases 13.9% on yr 2018-07-19

Shanxi province in North China generated 24.78 TWh of electricity in June, rising 13.94% from a year earlier, showed data from the provincial commission of economy and information technology.

6 China traders shun import thermal coal trades on weakening yuan 2018-07-19

Traders tended to avoid trades on import coal into China for the time being, as the depreciating yuan pushed up cost in a market that has already started weakening amid slack buying from Chinese utili

7 China thermal coal prices slide further; stocks remain high at N ports 2018-07-19

China's thermal coal market showed no sign of pickup with prices continuing to step down, duo to thin demand as most buyers are waiting for a lower price to take position. During the past

8 Fenwei Analysis: impact of Tangshan production curbs on coal, coke & steel markets 2018-07-19

1 Background The top steelmaking city of Tangshan in northern China's Hebei province registered the worst air quality among 74 cities during April and May this year, according to air quality ra

9 Shanxi Jun outbound rail coal sales hit 17-mth high 2018-07-19

China's coal-rich Shanxi province sold 27.92 million tonnes of coal via railway to end users outside of the province in June, touching a new high since last February. It posted a 0.2% tic

10 CR Power Jun production down 1.8% on yr 2018-07-19

China Resources Power Holdings Company Limited ("CR Power", stock code: 0836) saw total electricity generation of subsidiary power plants decrease 1.8% from the same period of 2017 to 13.37 TWh in Jun

Most Read Articles

1 Indonesian coal ships stranded after regulating policy introduces 2018-07-10

Traders with old Tanda Registrasi and associated Ekspor Terdaftar licences to export coal since July 1, 2018 have been forbidden to do so, according to Wood Mackenzie. "Market rumours sug

2 China June power coal price index up 2.56% MoM 2018-07-12

China's monthly-issued price index of power generation coal increased 2.56% month on month to 528.57 yuan/t in June, rebounding from three-month falls, and 7.67% higher from a year ago, showed data

3 China's port restrictions cause berthing disruptions 2018-07-12

A wave of stricter port restrictions in south China has left steel producers searching for alternative ports to allow them to berth vessels carrying their imported metallurgical coal cargoes.

4 China's Jun coal imports rise 17.9pct on robust buying demand 2018-07-13

China's coal imports climbed by 17.9% from a year earlier to 25.47 million tonnes in June, showed data from the General Administration of Customs (GAC) on July 13, as coal-fired power plants accelerat

5 CHN Energy slashes Jul-term contract coal prices, sources 2018-07-11

China Energy Investment Group, also known as CHN Energy, has reduced its monthly contract prices of thermal coal for July delivery, market sources said. The coal giant asked its subsidiar

6 Rising supply, trade tensions expected to depress iron-ore market 2018-07-09

Iron ore is starting to buckle after a series of warnings that prices are set to drop as global supply rises, and as investors fret about the potential impact of escalating trade tensions between the

7 China coastal coal freights rebound as demand from utilities climbs 2018-07-09

China's coastal coal freight rates started to rebound in recent days, as shipping demand showed signs of recovery from utilities which saw rising coal burns amid hot days. Noticing that t

8 China import coal trades below expectations; offer prices mixed 2018-07-09

Few trades were heard clinched on import coal for China, with most cargoes in the hand of traders who gave varied offer prices. Low-CV Indonesian coal of 3,800 Kcal/kg NAR was offered at

9 Indonesian low-CV thermal coal prices firm amid supply shortage 2018-07-12

Coal supply from Indonesia, the world's top thermal coal exporter encountered a slowdown recently, due to continuously rainy weather, supporting prices of the power generation material to stay firm.

10 High offers crimp Chinese thermal coal import trades 2018-07-10

China's import trades of thermal coal remain tepid as foreign offers keep at a high level, even after Chinese yuan started to strengthen. Coal prices have been stable in recent days, said