Mongolian coal deliveries to China increase significantly in August

Mongolia's coal exports to China have been accelerating recently, as evidenced by the fact that coal transportation via truck has reached 1,000 units/day at the Ganqimaodu checkpoint in North China's Inner Mongolia, the country's largest import conduit for Mongolian coal, according to Chinese sources. A month ago, the volume was only at about 600 trucks/day, Mysteel Global notes.

"The implementation of 'fast track' processing from August has notably lifted coal imports from Mongolia," said a Shanghai-based market watcher, adding that Mongolian coal deliveries via the Ceke checkpoint, another major conduit also in Inner Mongolia, had increased as well to 700 units/day from 500 units/day in late July.

The "fast track" measures, announced by Chinese government authorities on July 8 in view of on-going COVID concerns, allow the establishment of special areas at key land ports on the China-Mongolia border for Mongolian trucks to unload coal and where no physical contact is required.

Since August 12, truck drivers have been allowed to stay overnight at Ganqimaodu, and the truck-delivery time-window at the checkpoint has been lengthened from 8:00-18:00 Beijing time previously to 8:00-20:00, according to sources.

Drop in coal prices

Impacted by the increase in Mongolian coal imports and sliding prices for Chinese domestic coking coal, Mongolian coking coal prices have dropped too. As of August 21, the price for 11% ash, 25% volatile matter and 0.7% sulphur Mongolian coal had softened by Yuan 10/tonne ($1.4/t) on month to Yuan 950/t including the 13% VAT.

Mongolia's overall coal exports fall during Jan-Jul'20

As reported, Mongolia's total coal exports rose by 8.2% on month to 2.6 million tonnes in July though last month's total was still 8% lower on year. Over January-July, Mongolia exported 11.2 million tonnes of coal, a dramatic decline of 46.1% on year, according to the country's Customs data. China is the destination of almost all Mongolian coal for export.

Owing to the slowdown of Mongolian coal exports, wash plant operations at the border were seriously impacted owing to the limited supply of raw coal, according to a report by the government of Urat Middle Banner, where the Ganqimaodu checkpoint is located.

With met coal as the major commodity, the volume of goods transported by rail from Urat Middle Banner slumped by 37.9% on year to 5.7 million tonnes over January-July, the report noted.

This article has been exchanged under article exchange agreement between Mysteel Global and SteelMint