Chinese Coal Imports Witness Modest Decline M-o-M in Jun’19

China’s coal imports have fallen 1.3% M-o-M to 27.1 MnT in Jun’19 compared with 27.47 MnT in May’19, as domestic miners raised coal production to ensure adequate supply ahead of summer. Import volume was still 6% higher on the year from 25.47 MnT in Jun’18.

The country had recorded a monthly growth of 14% in coal imports during June last year.

However, after urging its major miners to step up coal production, the country had managed to reduce import levels during Jun’19. Apparently, the country had raked up 333.35 MnT coal output during the month, up 6.7% M-o-M from May’19 and up 10.4% Y-o-Y, data from the National Bureau of Statistics showed.

Traditionally, summer is a high season for electricity demand in China due to increasing use of air conditioners in hot weather. Power utilities were been asked to set up coal warehouses and keep coal inventories at a “reasonable level” to avoid power blackouts.

Coal Imports Up 6% Y-o-Y in H1 CY19:

Chinese coal imports totaled 154.59 MnT in the first half period of CY19, up 6% Y-o-Y from 145.5 MnT in the corresponding period of CY18.

Import volumes in CY19 have been affected by a range of seasonal and policy drivers.

Imports reached a near-record high in Jan’19, as buyers restocked after an annual import quota was enforced towards the end of CY18.

Coal intake then fell sharply in the subsequent two months y-o-y, amid Lunar New Year celebrations in early Feb’19. Besides, Imports also decreased as a result of import policies, such as enhanced quality testing, which led to delays at several ports.

An increased coal intake during the second quarter of CY19 (Apr’19-Jun’19), had ultimately helped the country to post an overall growth during H1 CY19.

It is needless to say that policy uncertainty has been and is expected to continue to affect Chinese coal market.

Australian Energy and Mineral Quarterly report has highlighted that the Chinese government is likely to regulate overall import levels to achieve various goals, including balancing domestic consumption & production, stablising domestic coal prices, and supporting the domestic industry to counter the effects of trade tensions with the US.