China Coal Imports: A Dry Bulk Market Conundrum

China Coal Imports: A Dry Bulk Market Conundrum

October 20, 2020

China’s coal imports have declined. The decline came in the third quarter of the year after a promising start. shipbroker Banchero Costa said that many were surprised when coal imports boomed in 2019. They expected the government to be strict in importing cargo. Because China usually limits its imports to help domestic miners. This year, despite the severe economic crisis, its imports to China have been surprisingly flexible. However, the 2020 quarter was very disappointing.

He said that by looking at Refinitive ship data, we found that China imported 197.8 mln tonnes coal by sea freight in the first nine months of 2020. This represents a 2.5% decrease. Because in the same period of 2019, imports were 202.8 mln tonnes. But this is more than 181.1 mln tonnes in 2018 and 178.3 mln tonnes in 2017.

It all started very well in the first quarter of 2020. Coal imports in the first quarter were 69.4 mln tonnes. As a result, it has increased by 18.4% compared to the same period last year. But the situation in the second quarter of 2020 became a bit disappointing. And it increased by only 1.8%.

In this regard, he believes that in the third quarter the situation worsened significantly. Because in January and September, China imported only 58.0 mln tonnes of coal. As a result, we saw a decrease of 20.8% compared to the same quarter last year.

China is a country that consumes and produces half of the world’s coal. Therefore, the amount of import curbs may vary based on the government’s competitive priorities for protecting domestic miners and power plants. Thus, in previous years, coal imports typically declined in the fourth quarter of the year. Therefore, what is happening this year is very worrying. Because in the last quarter of this year we will see more decline.

Many media outlets also report possible restrictions on Australian coal. The reason is the deterioration of political relations between the two countries. But despite all this, Indonesia is the country that has seen the sharpest fall this year. “Indonesia had been the main beneficiary in last year’s increase in China’s demand for coal,” he adds.

In the first 12 months of 2019, China imported 124.4 mln tonnes from Indonesia. But imports from Indonesia fell 16.4% this year. And its amount was 80.2 mln tonnes in the first 9 months of 2020. Coal sea freight from Australia to China continue to rise this year despite the policies. And from January to September 2020, it increased by 0.8% and has reached 68.7 mln tonnes. Coal imports from Russia have also increased. Exports from Ukraine to China also rose 78.9% in the first quarter to 5.8 mln tonnes.

Source: The Hellenic Shipping News

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