Mongolia hard to fully replace Australia in coking coal exp to China, but growth may continue

sxcoal.com Policy,  Import & Export,  Coking Coal 2020-10-28 16:46:45

Mongolia overtook Australia as China's top coking coal supplier in September, with shipments to China further expanding compared with the latter, but completely replacing Australian coking coal with Mongolian material would be challenging in China.


Chinese steel mills had a good appetite for Australian low-vol premium coking coal, due to its high quality and cost-effectiveness. Australian low-vol premium coking coal is similar to domestically-produced Liulin #4 coking coal in Shanxi, but annual production of such coal in China only accounted for less than half of the Australian imports.


The supply gap of premium coking coal after China put a break on Australian coal imports can't be filled by domestic coking coal, so does Mongolian coking coal, which has lower CSR (coke strength after reaction) compared with Australian PLV.


Nevertheless, Mongolian material needs to be mixed with high-quality Shanxi coking coal in producing met coke, and blending parameters need to be strictly controlled.


The irreplaceability of premium Australian coal with low sulfur and ash contents determines that even if import of the material will be restricted for a long time, it is nearly impossible to be completely replaced by Mongolian coal, said one senior official with China Aluminum International Trading Group Co., Ltd. at an industry conference October 22.


"The increase in Mongolian coking coal, however, is still able to help ease the supply pressure in some areas, especially in northern China. And the fall of Australian coal may help to shore up Mongolian coal prices and long-term contract prices of domestic coking coal at China's coastal steel mills, the major consumer of imported Australian coal," he said.


However, downstream users in southern China would find it hard to switch from Australian coal to Mongolian material due to logistics inconvenience and high logistics costs, which may force some to seek more expensive domestic coal produced in Shanxi and Shaanxi.


Despite this, high Mongolian coking coal inflows to China are likely to be a trend in the long run, because of Mongolia's geographical proximity, as wells as efforts made between the two countries to facilitate transnational trades, including the establishment of the "Green Channel" and construction of cross-border railway.


China's imports of Mongolian coking coal soared 26.7% month on month to 3.89 million tonnes in September, hitting a new high since 2014. The imports nearly doubled China's intakes of Australian coal, which slumped 34.4% from August to 1.98 million tonnes, customs data showed.


The two countries were still major coking coal suppliers to China, with combined shipments accounting for 87.4% of China's total coking coal imports of 6.72 million tonnes.


China's move to take fewer shipments from Australia could be a strategy to diversify supply sources and reduce reliance on Australian coking coal.


The country's restriction on imports of Australian coal will probably relaxed when new quotas are introduced next year, and its appetite for Australian supplies is widely expected to remain weak until then.


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

Share this article
Connect with us

Editor's Pick

1 China's met coke demand poised for further pullback on Shandong's steel curb plan 2021-07-23

China's metallurgical coke demand will be increasingly under downside pressure in the second half of the year, as major steel production areas may do step up efforts to reduce output other than just k

2 China Coal Daily Track (Jul 23) 2021-07-23

Thermal coal Production area Thermal coal supply remained tight, as coal production was strictly in line with the approved capacity and some coal mines in Ordos halted production for exhaustion

3 Safety check, rainfall worsen Chinese thermal coal supply 2021-07-23

A batch of small-and-medium private coal mines were ordered to suspend operation for safety inspections in northwestern China's Shaanxi province, following a coal mine accident in mid-July, leading to

4 Indonesia H1 coal output lags behind annual target 2021-07-23

Indonesia's coal production reached 286 million tonnes in the first six months this year, only 45.76% of its annual target of 625 million tonnes, said the Ministry of Energy and Mineral Resources (ESD

5 Weekly global coal market news summary (Jul 19-Jul 23) 2021-07-23

Seaborne thermal coal prices break records again amid supply tightness With strong recovery in global coal demand worldwide driven by strengthened economic activity and unprecedented heatwaves

6 Weekly China coal market news summary (Jul 19-Jul 23) 2021-07-23

China's NDRC urges utilities to ensure at least 7-day coal stockpiles China's National Development and Reform Commission (NDRC), the country's top economic planning agency, set a deadline fo

7 China's hydropower generation lower than expected with less rainfall 2021-07-23

The less precipitation in China this year may render hydropower unable to live up to expectation of delivering more power to ease the supply pressure on coal-fired power plants. Chi

8 Chinese provinces mostly log yearly rises of thermal power output in H1 2021-07-23

The majority of Chinese provinces and regions posted yearly growths of thermal power generation in the first half of 2021, reflecting the large power consumer's reliance on coal-fired power especially

9 Carbon emissions to reach record levels in 2023 for underfunding 2021-07-23

Finance allocated to clean-energy globally only accounted 2% of the $16 trillion in total fiscal support for economic stimulus in respond to the COVID-19 crisis, the International Energy Agency said i

10 China's thermal coal shipment gathers pace as Typhoon In-fa approaches 2021-07-23

China's major ports and utilities expedited thermal coal shipment and unloading, as the Super typhoon In-fa is heading toward the eastern China and will likely impact Zhejiang and Fujian, major coal c

Most Read Articles

1 Dilemma: Chinese coal-fired power plants and the 7-day-plus inventory mandate 2021-07-20

China's National Development and Reform Commission, the country's top economic planner, has ordered power plants to build their coal inventory to the equivalent of at least seven days of consumption b

2 China's coking coal transport constrained as heavy rains paralyze railways 2021-07-21

The unprecedented heavy rains that hit a wide range of areas in China, particularly Henan province in central China, have affected coking coal production and delivery in some areas, dragging down coal

3 Beyond 2014, China's coal consumption may see a new peak 2021-07-19

There would likely be a new peak if China's coal consumption continues to grow this year, said BP's chief Economist Spencer Dale at a media interview for Statistical Review of World Energy 2021 on Jul

4 China may have high appetite for premium coking coal imports amid coke capacity increment 2021-07-22

China is expected to remain a big purchaser for non-Australian premium coking coal in the second half of the year, as domestic supply is unlikely to meet expanding demand for high-grade coal, even as

5 China to add over 200 Mtpa advanced coal capacity this year, NDRC 2021-07-19

China will increase more than 200 million tonnes per annum (Mtpa) of advanced coal production capacity in this year, as part of efforts to strengthen coal supply and better respond to surging demand i

6 Review of China's coal imports in June 2021-07-21

China's coal imports posted their strongest year-on-year and month-on-month growth so far in June. The country imported 28.39 million tonnes of coal last month, up 12.3% or 3.11 million tonnes from a

7 Thin price edge may discourage China's coal import from Indonesia 2021-07-19

With an "on-and-off" upward trend since late May, Indonesian thermal coal prices have been setting record highs, mainly driven by strong and steady demand from China, but the demand could weaken in th

8 China's daily electricity use jumps over 10% from last summer's peak 2021-07-19

China's daily electricity consumption created a new record of 27.19 TWh on July 14, surging more than 10% from the peak level of last summer and adding more pressure on power and coal supply.

9 COVID fears hinder Indonesian thermal coal deliveries 2021-07-22

Many vessel owners were heard to be reluctant to fetch coal from Indonesia for fear of being infected by the Delta variant of COVID-19, which was roaring in Indonesia and other Southeast Asian countri

10 China H1 thermal coal imports fall 21.27% on yr, lignite down 6%, GAC 2021-07-21

China's thermal coal (including bituminous and sub-bituminous coal, but excluding lignite) imports fell 21.27% or 16.07 million tonnes year on year to 59.47 million tonnes in the first half of 2021, s