- Stronger steel output, speculating buying boost demand
- Supply, price rise concerns keep import interest elevated
Mysteel Global: China’s coking coal imports in July witnessed a 5.7% increase from June to 9.62 million tonnes (mnt), marking a further rebound from a nearly two-year low recorded in May, according to the latest data from the General Administration of Customs (GACC).
The main driver behind the import recovery was the revived buying interest among Chinese coke and steel producers, as steady growth in mills’ hot metal production – a weathervane for the country’s ferrous market – had driven them to seek cost-effective coal cargoes from the seaborne market, Mysteel Global noted.
Mysteel’s survey showed a 3.1% m-o-m rise in the combined hot metal output of 74.79 mnt at the 247 Chinese blast-furnace steel mills in July, which was also higher by 1.1% on a y-o-y basis.
Downstream coking coal buyers also looked to lock in cheaper imported coal cargoes last month to rein in production costs, as they anticipated further gains in domestic coking coal prices amid rising supply concerns, sources noted.
Meanwhile, speculative stockpiling at coal trading houses also accelerated in the past two months, sparked by rapid surges in Dalian’s coking coal futures as spreading market chatter about a potential reduction in coking coal availability kept lifting market sentiment since early June.
Chinese authorities’ investigations into coal overproduction in key coal-producing areas last month intensified the prospect for a tighter supply of coking coal, while output at several coal hubs had already been disrupted by stricter safety and environmental checks. Prior to that, uncertainties over the key China-Mongolia cross-border Gashuunsukhait-Ganqimaodu railway and Mongolia’s coal exports to China following Mongolia’s top leadership transition also buoyed sentiment in the futures market.
As the top coking coal supplier to China, imports from Mongolia increased by another 5.8% m-o-m to 4.98 mnt in July, although the volume slipped by 1.1% compared with July 2024, GACC data showed.
Mysteel learnt that despite a five-day closure of Chinese Customs at major China-Mongolian border ports during 11-15 July and a lack of Mongolian truck drivers in the following three days, coking coal shipments from Mongolia recovered quickly in the last two weeks of July.
For example, daily Mongolian coal clearance via North China’s Ganqimaodu border crossing — the largest gateway for Mongolian coal exports to China — jumped by 52.4% from the previous days of the month to average 145,800 tonnes(t)/day during 19-31 July, according to Mysteel’s data.
In parallel, China’s imports from Russia soared 45.2% m-o-m and 26.7% y-o-y to 3.38 mnt in July. This lifted Russia’s share in total Chinese imports to 35.1%, the highest since January 2023. The impressive growth was associated with the rising cost performance of Russian cargoes last month, as Russian miners tabled aggressive offers to boost exports, Mysteel Global noted.
However, coking coal imported from the third-largest supplier, Canada, retreated significantly by 28.7% m-o-m last month, to 704,280 t in July, according to GACC data.
China’s intakes of coking coal from Australia also tumbled by 58.2% m-o-m and 62.7% y-o-y to 431,100 t, mainly as Indian steelmakers such as JSW Steel, SAIL, and Tata ramped up imports from Australia, which drove up prices of Australian coal and reduced its availability for Chinese buyers. India’s coking coal imports from Australia jumped by 20.6% from June to 4.1 mnt in July.
Over January-July, China’s coking coal imports from all sources totalled 62.5 mnt, down by 8% compared with the year-ago level, the GACC statistics showed.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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