Mongolia to surpass Australia as China's top coking coal supplier

sxcoal.com Viewpoint,  Import & Export,  Coking Coal 2019-09-30 18:26:11

Resource-rich Mongolia is expected to surpass Australia to become the biggest coking coal supplier to China in the mid-to-long term, as price-competitive Mongolian coal keeps flowing into its close neighbor, predicted Chang Yijun, president of China-based coal consultant Fenwei Energy Information Services Co., Ltd. at a mining industry summit.


 


There is great possibility that exports of Mongolian coking coal to China will further pick up in the future, benefiting mainly from active efforts made by the Mongolian government, steady demand in China, and the newly commissioned Haoji railway, Chang said at the Minerals and Mining Business Summit held in Mongolia's capital city Ulaanbaatar on September 27.

 

The summit, the 17th annual Discover Mongolia conference, was organized by the Ministry of Mining and Heavy Industry, the Business Council of Mongolia and the Mongolian National Mining Association.

 

Chang was invited to give a speech on the Chinese and Mongolian coking coal market at the summit, which was co-organized by sxcoal.com, an industry portal run by Fenwei Energy.

 

Construction of a rail project from Tavan Tolgoi mine to Gashuun Sukhait border crossing in southern Mongolia was restarted officially on August 15 this year after years of halt, and is scheduled to complete and put into use by 2021.

 

This will help Mongolia deliver over 30 million tonnes of Mongolian coking coal to China each year at much lower transport cost compared to current truck shipment, said Chang.

 

Other railways will also be built to move coal from Tavan Tolgoi mine to Sainshand and more eastward to Choibalsan in Mongolia, Mongolian media reported earlier. This will help move more Mongolian coal into three Chinese border crossings – Ganqimaodu, Ceke and Mandula – in Inner Mongolia autonomous region.

 

The Mongolian government even planned to transport its coking coal to Caofeidian port, one major coking coal transfer port in northern China, for export to the international market.

 

Mongolian coal will also be transported to central Chinese consumption areas via Haoji railway, which has a designed transport capacity of 200 million tonnes per year, Chang pointed out.

 

Officially commencing operation on September 28, Haoji railway is committed to transporting coal from Inner Mongolia, Shaanxi, Gansu and Ningxia to central provinces like Hunan, Hubei and Jiangxi.

 

China's coking coal consumption layout is undergoing changing, according to Chang. Hebei in northern China and Shandong in the eastern part of the country have been shedding backward coke-making capacity in response to the government's call for cleaner skies.

 

As more capacities are being closed in the Beijing-Tianjin-Hebei region, northeastern provinces could see an increase in coke production, Chang noted, adding Inner Mongolia is far from reaching its full coke capacity of 42.19 million tonnes per annum.

 

"These changes will promise more growth room for coking coal exports from Mongolia." Chang said.

 

Data showed Mongolian coal imports through Ganqimaodu border crossing reached 13.8 million tonnes in the first eight months, including 2.51 million tonnes imported in August, up 45.34% month on month.

 

From January to August, China imported 23 million tonnes of coking coal from Mongolia, marginally below 23.08 million tonnes bought from Australia, showed Chinese customs data.

 

In 2018, Mongolia exceeded Australia to be China's largest coking coal supplier with 27.69 million tonnes of exports, compared with 27.53 million tonnes from Australia.

 

China's coking coal imports from Mongolia may further grow to 30.9 million tonnes this year, Chang projected, while noting growth may slow down in 2020 impacted by limited expansion of demand.

 

China's coking coal consumption is estimated to rise by 3.5% from a year earlier to 544 million tonnes in 2019, said Chang, based on projected output of crude steel and pig iron at 970 million and 800 million tonnes, up 4.5% and 3% on the year separately.


 


China produced 660 million and 540 million tonnes of crude steel and pig iron in the January-August period this year, expanding 9.1% and 6.9% year on year respectively, according to the National Bureau of Statistics.

 

Due to great differences in application value, Mongolian coal should be washed and processed to a deeper extent and more customer-tailored, in order to enhance competitiveness in the Chinese market, Chang noted at the summit.

 

"Fenwei Energy has been providing coal-related consultancy services to many Mongolian firms, and we look forward to work with more companies in tapping into the huge potentials in Chinese market, " he said.

 

Estabilished in 1998, Fenwei has developed the most comprehensive and exclusive China coal databases which cover the vertical industry chain. The Fenwei CCI index series are widely adopted by domestic and international companies in contracts signing and negotiation.

 


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

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