Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
China's coal imports rose to 299.7 million tonnes in 2019,
customs data showed on Tuesday, despite a government control to cap
coal shipments at the 2018 level.
China's 2019 coal imports were up 6.3% compared with 2018
levels, while December's imports tumbled nearly 73% to 2.77 million
tonnes, marking the lowest monthly level in more than a decade
after customs stopped clearance at nearly all ports in the final
month of 2019.
China coal imports to increase in January with eased
import control
In reality, around 18 million tonnes of coal arrived in December
2019 based on commodities trade flow intelligence, IHS Markit Commodities at
Sea.
Even considering land transported volume from Mongolia and
Russia, understood to have around a 20% market share in China's
coal imports, the custom clearance figure in December 2019
indicates the large missing volume will be pushed into 2020.
In our view, January's coal imports in China might be a record
volume with December's missing cargo included. However, actual coal
shipments to China will not jump significantly as major coal
exporters including Indonesia and Australia usually have a seasonal
decline in production over the first quarter of the year with
weather disruption including heavy rain and cyclones.
We are likely to see a record clearance volume in January 2020,
with December's missing cargo included, as happened last year.
China's coal imports are projected to recover in the next few
months, with expectations that controls will be eased at major
receiving ports at the beginning of January.
Furthermore, there will be speculative demand from traders as
international prices remain attractive compared with Chinese
domestic prices.
However, coal import growth over the first quarter will be
limited with major coal exporters experiencing a seasonal decline
in production and Chinese New Year approaching at the end of
January.
China's total import quota is expected to be capped at around
300 million tonnes this year.
Upside risk:
The China-US trade relations have stablized
The Chinese central government introduced further stimulus
measures to maintain a healthy economic growth for next year
International coal prices remain attractive enough for traders
to continue to speculate
Downside risk:
Tougher coal import controls introduced by the Chinese
government
Lower than expected coal consumption with higher alternative
energy production including hydro and renewables
Chinese domestic coal production increased significantly
Posted 14 January 2020 by Daejin Lee, Consulting Principal, Maritime & Trade, IHS Markit
