The import volume has been greatly reduced, and the coal price has been inverted or continued - the review of the imported coal market in the first half of the year and the outlook for the second half of the year

　　Three changes in China's imported coal market in the first half of the year: The proportion of Indonesian coal decreased, while the proportion of Russian coal and Mongolian coal increased.
From the perspective of imported coal types, the decline in thermal coal imports was the most obvious.
In the first half of the year, low-calorie coal was mainly imported and purchased
.

　　Multiple factors have affected the substantial decrease in imports

　　In the first half of this year, the amount of imported coal in China has dropped significantly
.
Data from the National Bureau of Statistics shows that from January to June, China imported a total of 115.
001 million tons of coal, a year-on-year decrease of 17.
5%
.
There are two reasons for the sharp decrease in imports
.

　　One is the January ban on Indonesian coal exports and its ripple effect
.
The sudden announcement of the ban has led to the near stop of transactions in the Indonesian coal market, the interruption of China's main source of imported coal, and the rise in international coal prices
.
Although the ban was lifted at the end of January, the impact on the supply chain was difficult to rectify immediately.
From January to February, China's coal imports fell sharply by 45.
93% year-on-year
.

　　Second, the global coal price continued to run at a high level, and the import price was inverted to suppress the coal arrivals
.
After experiencing tight energy supply in 2021, the outbreak of geopolitical conflicts this year has prompted countries to increase their demand for energy security
.
As a stable and relatively cheap energy source, the demand for coal has grown significantly
.
The EU is determined to get rid of its dependence on Russia for energy, but it is difficult to find alternative energy sources in a short period of time, coupled with high natural gas prices, many European countries have to restart coal power
.
The high-temperature weather that started in March caused India, which was in a low inventory state, to suffer from "coal shortage" and "electricity shortage", and the Indian government increased its efforts to import coal
.
In addition to the increase in demand, the reshaping of the global coal trade pattern and the increased uncertainty and vulnerability of the supply chain have also led to an increase in trade costs and shipping costs
.
Judging from the average unit price of imported coal in China, from January to May, the average unit price of imported coal was US$159.
59 per ton, a year-on-year increase of 110%
.

　　The continued high operation of overseas coal prices is in stark contrast to China's domestic supply guarantee and stable price.
Domestic power plants are less willing to accept the high price of imported coal, which is the main reason for the decline in China's coal imports this year
.

　　Structural changes in imported coal market

　　From the perspective of import source countries, Indonesia, Russia, and Mongolia are still the top three imported coal source countries in China
.
From January to May this year, the proportion of Indonesian coal fell by 0.
76 percentage points compared with 2021, while the proportion of Russian coal and Mongolian coal increased by 1.
73 percentage points and 0.
72 percentage points, respectively, mainly due to the implementation of China's temporary exemption policy on import tariffs since May.
, Russia's coal prices are relatively advantageous, and Mongolia's coal customs clearance conditions have improved
.
The proportion of Russian coal imports increased to 19.
34%, which to a certain extent alleviated the problem of insufficient sources of high-calorie coal imported into China's coastal areas due to the decrease in Australian coal imports
.
In addition, the proportion of China's coal imports from Canada and the Philippines has also increased slightly
.

　　In terms of imported coal types, thermal coal imports declined the most, while coking coal imports increased significantly year-on-year
.
From January to May, China imported 89.
56 million tons of thermal coal, a sharp drop of 20% year-on-year, and imports of coking coal and anthracite were 18.
15 million tons and 3.
51 million tons, an increase of 16% and a decrease of 2% respectively
.
The main reason is that it is difficult for power companies to transfer high coal price costs downstream, while the pricing of downstream products of non-power companies is more market-oriented, and costs can be transferred downstream, so they are more accepting of prices
.

　　In terms of the calorific value of imported coal, due to the high price of overseas coal, China's power plants have lowered their procurement standards, and the bidding is mainly based on Indonesian low-calorie coal with lower absolute prices.
In the first half of the year, imports and purchases were mainly low-calorie coal
.
The decline in the average calorific value of imported coal will increase the daily consumption of power plants in peak season, resulting in a rapid decline in the available days of inventory, which will also form a certain support for domestic medium and high-calorie coal prices
.

　　Internal and external coal prices upside down or continue

　　At present, the key factor that determines the quantity of imported coal in China is still the price difference between internal and external coal
.
Under the circumstance that overseas energy prices are still relatively strong, short-term energy prices will still run at a high level.
In the follow-up, with the increase of macro risks and the progress of overseas energy replenishment, downward pressure on energy prices will gradually appear
.
The fall in coal prices may lag behind oil and gas prices, but there are still upside risks in the fourth quarter
.
Therefore, the inversion of the domestic and foreign price difference of imported coal in China is expected to improve in stages, but it is also possible to continue the weak inversion
.
Considering that under the control of domestic production and price stabilization, power plants will still have limited enthusiasm for purchasing high-priced imported coal.
The author predicts that China's total coal imports for the year may decrease by 60 million tons to 80 million tons year-on-year
.

　　Under the expectation of the steady growth policy, it is expected that China's industrial economy will improve in the second half of the year, which will further increase the coal consumption of thermal power in coastal areas, thereby increasing the pressure on coastal thermal coal stocks
.
Under the circumstance of supply and transportation constraints, considering that the increase in industrial power consumption during peak summer and autumn may cause greater inventory digestion, before the peak winter, coastal power plants still have a great pressure on stocking, which needs to be increased.
Imported coal, especially imported coal with high calorific value
.

　　In addition, we also need to pay attention to the impact of the "La Niña" event on the global coal market
.
Recently, the British "Nature" magazine predicted that a rare "triple" La Niña event may occur, and the US National Oceanic and Atmospheric Administration predicted that the La Niña phenomenon will continue until early 2023.
The probability is 51%
.
In the second half of the year, attention should be paid to the impact of extreme weather on the production of major coal exporting countries and the probability of a cold winter in the northern hemisphere
.
(Zhang Mohan)

From: China Coal News