China's thermal coal imports hit record high in July

Mysteel: China's imports of thermal coal reached a new record high in July, extending an upward trend that underscored the country's robust demand for the fuel, according to data released by the General Administration of Customs of the People's Republic of China (GACC) on 21 August.

The world's largest coal consumer imported 34.41 million tonnes (mnt) of thermal coal last month, up by 11.3% on year and 2.8% on month, the GACC data showed. This volume surpassed the previous record of 34.26 mnt set in December 2023, highlighting China's reliance on imported coal to meet its energy needs, Mysteel Global noted.

By origin, Indonesia remained the top supplier of thermal coal to China in July, followed by Australia, Russia, Mongolia, and Colombia, according to GACC data. Imports from Indonesia last month jumped 22.3% on year and 16% on month to 19.1 mnt, its highest since April and the twelfth highest for monthly import since 2019.

This contrasts with prevailing perceptions of prolonged trading stagnancy in the Indonesian spot thermal coal market, where prices for 3,800 kcal/kg NAR coal, the grade most sought after by Chinese buyers, declined from $56/t FOB Kalimantan in early July to the current $52/t as assessed by Mysteel. However, spot trading, as Mysteel Global learned from traders, only took a tiny part of Indonesian coal imports by China, with the most majority shipped under long-term contracts, a more stable and sustained trading pattern.

Among the top five coal suppliers, Colombia has emerged as a rising star, primarily serving buyers in the Atlantic market. Its accumulated thermal coal shipments to China over January-July reached 6.01 mnt, 1.5 times the total volume for the entire year of 2023. In 2022, shipments from Colombia were almost non-existent, the GACC data revealed. Faced with weakened demand from Europe, Colombia has sought new markets, with China being a particularly favourable destination due to its vast demand potential, Mysteel Global noted.

However, despite the surge in accumulated shipments, Colombian thermal coal imports to China declined in July, falling by 13.4% on year and 39.3% on month to 0.82 mnt. Market sources attributed the declines to the completion of long-term contracts signed earlier in the year and a slight rebound in demand from Europe.

Looking ahead, sources highlighted ongoing supply challenges at Cerrejon mine, the second-largest coal mine in Colombia, which could probably lead to a slump in coal exports to China. Additionally, factors such as the price difference between shipments to Europe and China will also play a role in determining future coal imports.

In terms of recipients, Guangdong province led the way in July, receiving 6.42 mnt of thermal coal, followed by Fujian with 5.78 mnt and Zhejiang with 3.93 mnt, the customs data showed. These provinces, located along China's east and south coasts, are major consumers of imported thermal coal. In January-July, China's thermal coal imports reached 219.64 mnt, an 11.0% rise on year, the data showed.

This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.