China’s coal imports in November were 35.05 million tonnes in November 2020 compared to 11.67 million tonnes in November 2020 and 26.94 million tonnes in October 2021. This is the highest import rate of this product since the beginning of the year, as published on December 7th. Data from the General Customs Administration of the PRC (GTU). Overall, coal imports to the PRC in the first 11 months of this year amounted to 292.32 million tonnes, which is 10.6% more than in the same period in 2020.
Zhengzhou Commodity Exchange (ZCE) January thermal coal futures were selling at about 1009.80 yuan per tonne ($ 158.55) – at $ 160 a tonne, energy coal prices have been trading since the end of October. This situation has persisted since the State Reform and Development Commission intervened in the price situation of this type of fuel in the face of record prices (recorded 19 yuan or nearly $ 310 per tonne on October 19, 1982).
The authorities then offered, according to Reuters, a reduction in the cost of coal mining to 800-900 yuan per tonne ($ 125-140, respectively), which would allow start-ups to operate without losses during the current heating season. . On December 3, the State Development and Reform Commission (formerly the PRC State Planning Commission) proposed to set annual thermal coal prices in 2022 at 550 yuan and 850 yuan ($ 86 and $ 133) per tonne, and requested coal. mining companies in fixed-term supply maximization contracts next year.
In November, Reuters warned that some Chinese coal miners had been forced to sell their fuel at a loss due to the price range of 800-900 yuan.
Growth in coal coal imports to China has been on the rise since June 2021, Oksana Lukicheva, an analyst at Otkritie Bank’s raw materials markets, said. It surpasses last year’s steady level and grew from 12.3 million tonnes in June to 13.2 million tonnes in October. In November, while total imports of thermal and metallurgical coal are reported, imports of thermal coal will be around 31 million tonnes. notes. According to him, the current record volume of coal imports is mainly due to the fact that China continues to meet its storage facilities between expensive gas and the expectation of a cold winter.
Lukicheva added that although there is no specific country data on coal imports in November, Indonesia and Russia will definitely take first and second place in terms of supply, respectively. He admits that China will continue, as it is known this month, to buy Australian coal, which is “banned”. Overall, experts believe that coal imports will remain high in December and January, but in terms of November volume, it will still fall. The reason is a worldwide vacation. Fluctuations in the volume of purchases will also depend on the weather and gas prices, Lukicheva concluded.
China is pursuing forced purchases of coal abroad in the world, and especially in the face of stable Asian gas prices, said Nikita Blokhin, a senior analyst at Alfa-Bank.
The rise in coal imports is directly linked to the country’s explosive rise in electricity demand, says Kirill Rodionov, an expert at the Institute for Fuel and Complex Energy Technology Development. In the first ten months of 2021, China’s electricity consumption grew by 12.2% year-on-year, according to the China Electricity Council. Given that, according to BP, the share of coal generation in China in 2020 was 63%, which could not lead to an increase in coal demand.
For Russian companies, the observed trend could lead to an even stronger shift in coal exports to the East. In 2018, the share of East Asia was 43% of Russia’s thermal coal exports, compared to 52% in 2020, according to the Federal Customs Service (FCS). At the end of 2021, this share is likely to be even higher, as this year was also favorable for European supply: from January to October, European coal imports rose by 30% (from 39.7 million tonnes to 39.7 million tonnes). Refinitiv according to the data agency), says the expert.