China's Coal Supply Sufficient - China Coal Association

Friday, 16 December 2011

China will see increased efforts in coal supply across the country, with the total coal production this year grew 300 million tonnes to over 3.5 billion tonnes as compared to 2010, the China Coal Industry Association was cited as saying.

The country's net imports of the fuel in 2011 are expected to reach around 150 million tonnes.
China has seen rapid growth in energy supply and demand in the first ten months as compared to the same period last year, propping up the national economy, said officials with the National Energy Committee.

Coal production and consumption each in January-October amounted to 3 billion tonnes, up 9.5% and 13.1% respectively; railways transported 1.88 billion tonnes of coal, an increment of 13.4%; power generation and consumption each totaled 4 billion kwh, up 12.3% and 11.9%; crude oil imports increased 8.6% to 210 million tonnes and refined oil consumption increased 5.6% to 200 million tonnes; natural gas supply was 100 billion cubic meters, up 20%.
In an effort to secure coal supply with the coming of year-end, China's Ministry of Railway improved its transportation plan as early as November and struggled to meet the nation's demand for the fuel. Currently, coal inventories at the country's 363 direct-supply power plants were sufficient for around 20 days of consumption.

However, the National Development and Reform Commission (NDRC), China's top economic planner, also warned that coal short supply would occur in some regions and considered it a tough task to ensure stable coal supply during the winter and coming spring.
The NDRC announced on November 30 adjustments for the prices of non-residential power and thermal coal in order to ease power shortages and reduce financial pressure on power companies.
The NDRC also said that it will allow the contract price of major thermal coal to float by no more than 5 percent next year, but the spot price of 5,500-kilocalorie coal should be capped within 800 yuan per tonne at major shipping ports.

The prices will stay in place until thermal coal prices stabilize on a national level, it said.
"The important thing is to control energy demand at a reasonable level and strengthen efforts in energy saving and emission reduction. We also need to spare no efforts to promote industrial structural adjustment in line with the 12th Five-year Plan and curb overcapacity and the excessive development of energy-intensive industries," said Zhang Guobao, an official with the National Energy Committee.
Industry experts expected a slowdown in energy-demand growth next year due to sluggish global economy, slower pace in national economic growth and increased efforts in energy saving and industrial structural adjustment.

China's coal capacity will grow year by year and its railway transportation capability will see marked increase, while the growth in power demand is expected to recede to around 10%, said a researcher with the NDRC.

The China Energy Research Society appealed, in a report about China's energy development in 2011, released recently, that China should focus on improving energy pricing mechanism during the 12th Five-year Plan Period and accelerate energy marketization.

Source: Steel Home

China’s SA coal imports rise three-fold in October

Sunday, 11 November 2011

China, the world’s biggest coal consumer, increased imports of coal from South Africa three-fold in October from a year earlier, Mjunction Services Ltd. said in a note to clients.


Purchases rose to 2.59 million metric tons last month from 863,000 tons a year earlier as imports became cheaper than supplies from Chinese mines, India Coal Market Watch, a unit of Mjunction, said today. China’s purchases were 912,000 tons in September.

China’s imports accounted for 35 percent of the 7.38 million tons shipped from South Africa in October, exceeding India’s purchases of 1.26 million, according to the data from Mjunction, a joint venture between Tata Steel Ltd. and Steel Authority of India Ltd. India typically purchases more coal from South Africa than China.

Total imports of coal by China rose to a record in September, increasing 25 percent to 19.1 million tons from a year earlier, the National Development and Reform Commission said in a statement last month on its website.
Chinese buyers typically increase purchases when the cost of coal from countries including Indonesia, South Africa and Australia falls, making imports more economical than domestic supplies.
Prices at Richards Bay have averaged $110.82 a ton in October 2011 compared with $152.98 at Qinhuangdao in China for 6000 kilocalories per kilogram coal grade, data from Petersfield, U.K.-based researcher IHS McCloskey showed.
Coal at Richards Bay in the seven days ended Nov. 4 fell to the lowest level in 11 months to an average $108.13 a ton, IHS McCloskey said.
South Africa’s exports to Asia rose 38 percent from a year ago to 5.43 million tons last month while exports to Atlantic countries fell 44 percent versus last year to 1.72 million tons, according to the note.

Source: Bloomberg

China's Coal Imports steam Ahead

Tuesday, 08 November 11

Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net coal importer in 2009.

Chinese seaborne steam coal imports equated to less than 5% of Chinese coal consumption in 2010. Despite this, China is now the world’s second largest steam coal importer, accounting for 13.7% of seaborne imports in 2010. Thus, any changes in China’s import volumes will have a major impact on the global seaborne steam coal trade.

The existence of a pricing arbitrage between domestic and international coal prices was the catalyst for the upturn in Chinese coal imports. In 2010, higher domestic prices led Chinese consumers to source more coal from the international market, where the price was lower. As the Graph of the Month shows, in January 2010, the price of Indonesian steam coal (spot price + freight) was $39 per tonne cheaper than the Chinese domestic price (spot price + coastal freight) in south China. As a result, China imported an average of 9.0mt per month in Q1 2010, compared to just 1.2mt in the same period of 2009.

However, during the first quarter of 2011, a reduced average of 5.4mt of coal was imported by China. This reflects a higher global coal price (up to $139 per tonne), which made domestic coal a more cost-effective option.

Other Factors
Since April this year, Chinese domestic steam coal prices have risen and now exceed international prices. Thus, Chinese imports reached 12.0mt in September, the largest volume on record.

Other factors, in addition to pricing, support this short-term movement towards coal imports. Firstly, there are fears about potential power shortages, following a sharp decline in hydroelectricity output (down 11.2% and 14.9% y-o-y in July and August respectively). Secondly, it is likely that there will also be heightened demand for coal for power generation, due to the onset of winter. The price arbitrage should stimulate imports, as should reports that the central government will lower taxes and port charges on imported coal.

Potential Limitations
In the medium-term, Chinese domestic coal production may be limited if the government drive for better mine safety leads to mine closures. However, this may not inevitably lead to heightened seaborne imports. Production in countries like Mongolia and regions like Inner Mongolia has been ramping up recently and a railway expansion programme, due to be completed in 2015, will facilitate large-scale coal exports from these areas.

However, it is important not to understate the long-term impact of Chinese demand on seaborne coal trade even though most coal currently consumed by China is produced domestically. Even if seaborne import’s share of Chinese coal demand were to increase by just 2% percentage points over the course of the next decade to stand at 5%, then(assuming long-term demand growth of 2.5%), this would equate to an extra 100mt of annual seaborne import requirements.

In the long-run, any developments along this line would offer a considerable upside for dry bulk trade.

source: Clarksons / Hellenic Shipping & coalspot.com

Chinese coal imports in 2011 seen 150 million tonnes to 160 million tonnes

Wed,19 Oct 2011

Reuters citing Mr Phil Ren of China Tader Coal SCM Company and Vice President of Northeast Asia Coal Exchange Center as saying that China 2011 thermal coal imports are likely to be around 150 million tonnes to 160 million tonnes having recovered in the second half of the year after a slow start.

Mr Ren said speaking at the Coaltrans annual conference in Madrid that China thermal coal imports could rise to account for 10% of the country total consumption 400 million tonnes in five years' time.

He said that China coal import levels are hard to predict because China imports more when domestic prices are higher than international prices, but the country in any case needs imported coal for the southeast regions.

He added that "For economic and transport reasons China has to import coal to meet its southeast consumption. He also said that imports could be 5% to10% of China total consumption which is forecast at 4 billion tonnes so therefore 10% of that is 400 million tonnes that's a lot of coal."

(Sourced from Reuters)

Coal Imports Into China Jumped 34% to Record in July,

Saturday, 20 August 2011

AZNCoal imports into China, the world’s biggest consumer, jumped 34 percent to a record in July, said Australia & New Zealand Banking Group Ltd. Shipments climbed “sharply”

from a year earlier to 17.53 million metric tons, Mark Pervan, an analyst at ANZ in Melbourne, said in a report today.
China bought more low-quality coal, according to the report. Imports came to 3.63 million tons for the anthracite variety, 4.05 million tons for coking coal and 9.85 million tons for thermal coal, it showed.
Coking coal is used to make steel, while thermal coal is burned to generate power. China is the world’s biggest steel producer.
Imports are set to accelerate next month or in October as utilities start to restock in anticipation of stronger winter demand, Pervan said. “Signs of a pickup in Chinese activity are supporting China imported coal prices,” he said.

Source Bloomberg

China's Net Coal Imports May Rise to 174 Million Tons, CCB Says

Thu,Mar10,2011 09:04

China, the world's biggest coal consumer and producer, may increase net imports of the fuel to 174 million metric tons this year to cover a supply shortfall, CCB International Securities Ltd. said in a research note.

The nation may purchase as much as 230 million tons of coal each year between 2011 and 2015 as domestic output growth lags behind demand, CCB analysts led by Karen Li said in the note dated yesterday. Imports may grow 7.7 percent annually in the five-year period, accounting for 5.6 percent of consumption by 2015 from 4.9 percent in 2010, according to the bank.

China bought more coal than it exported for the first time in 2009 when global prices were lower than the cost of domestic grades. Net imports, or overseas purchases minus exports, rose to a record 146 million tons last year from 103 million tons in 2009, according to Chinese customs data.

"Our forecast reveals a potential supply deficit of 190 million to 230 million tons of coal in China lasting from 2011 until 2015," CCB, a wholly owned subsidiary of China Construction Bank, said in the report. "The shortfall would need to be filled by massive coal imports."

The nation may add 600 million tons of new production capacity in the next five years, compared with 850 million tons in the preceding period, according to CCB. Output growth may slow to 3.4 percent annually in the five years through 2015 from 6.8 percent between 2006 and 2010, it said.

The price of power-station coal with an energy value of 5,500 kilocalories per kilogram at Qinhuangdao port, a Chinese benchmark, may average 850 yuan ($129) this year and 900 yuan in 2012, the analysts said.( By bloomberg)