China is estimated to import 50-60 mn t of coal from Indonesia out of the total 100-130 mn t import quota in the second half of 2020.
“China will import around 50-60 mn t of coal from Indonesia alone”, Su Chuanrong, Executive Director General of China National Coal Association, recently said in a webinar organized by Indonesian Coal Miners Association (ICMA).
In the first half, China imported 174 mn t of coal in total which is 13% higher against same period last year. In 2020, China is expected to import a total of 271-281 mn t of coal. From Indonesia, the country imported 87.1 MnT of coal during January to June 2020, 13.5% higher y-o-y basis.
China has implemented coal import quota policy to primarily support the domestic coal mining industry, particularly its workforce, which produced 1.8 billion tonne of coal in the first half of 2020.
Su Chuanrong added that there are still opportunities for coal exporters from Indonesia to supply coal to Chinese markets. “The price gap between China’s domestic coal and imported coal prices are widening,” she said.
Meanwhile, IHS Markit said that China’s government is expected to adjust its coal import policy this year by accommodating China’s end users demand of coal during peak seasons. It is based on the recent internal meeting of the National Development and Reform Commission (NDRC), China’s top economic planning agency.
“China will accommodate the import policy based on seasonal demand, they will probably give more import quota for end users during peak seasons, which are summer and winter, and tighten the import quota during weak seasons,” Meng Meng, Principal Research Analyst – China of IHS Markit, said during webinar recently.
The import policy adjustment, according to Meng Meng, is made following problems resulting from the implementation of coal import quota policy in recent years. She added that a number of China’s end users had few coal import quota left during peak seasons.
“The government issues import quota in the beginning of the year, then many end users deal with backlogs in the beginning of the year. But when summer and winter comes, there’s not much quota left,” she said.
Coal import quota by China’s government, according to Meng Meng, is more about the government’s priority to stabilize domestic coal prices, providing stimulus for economy and support local power utility companies rather than controlling coal import volume.
Leave a Reply