China’s coal imports dropped by 10% y-o-y to 279.5 million tonnes (mnt) in January-November 2022 amid improved domestic production. To deal with the coal shortage, the National Development and Reform Commission (NDRC) took measures by encouraging power generators and miners to sign longer term supply deals and boosting output from mines.
The largest share of imports was from Indonesia at 153.28 mnt in the period under review though shipments from the country fell by 25% y-o-y.
China imports Indonesian thermal coal for its power sector. This year, the country’s power requirement was sluggish due to reduced industrial activities amid Covid-led lockdowns. Also, the Russia-Ukraine conflict had led to Indonesian and other-origin coal prices touching all-time highs in March. Prices remained elevated for most part of the year, making Chinese buyers take a backseat.
China’s coal imports from Russia increased by 2% y-o-y to 62.51 mnt in January-November 2022. In case of Russian coal, imports of coking coal recorded a higher increase vis-a-vis thermal coal. Chinese buyers favoured Russian coking coal for its good quality and lower prices, with western countries having imposed sanctions on Russia.
Chinese imports from Mongolia stood at 26.16 mnt in January-November 2022 against 15.53 mnt in January-November 2021. Imports from USA stood at 10 mnt, down compared with 15.05 mnt in the same period last year.
Coking vs thermal coal imports
China’s thermal coal imports in January-November 2022 were recorded at 45.29 mnt, down 39% y-o-y while coking coal imports picked up by 22% y-o-y to 57.37 mnt.
Now as the winter heating season has begun in China, utilities have accelerated inventory building to cope up with rising consumption.
Domestic coal output rises 11% y-o-y
China’s coal production in January-November 2022 rose by 11% y-o-y to 4.09 bnt. Production improved as the government seeks to improve energy security and reduce imports dependency.
Indonesian exports ban in January followed by sky rocketed prices caused due to the Ukrainian war increased China’s reliance on domestic coal.
Almost one-third of the new coal mines planned for the world are in China, guaranteeing that output will keep rising in the top producer, even as calls grow for the dirtiest fossil fuel to be phased out to avoid the worst effects of climate change.
China’s coal output is expected to increase in the coming years as it leads the world in terms of proposed new coal mines with 29% share at 559 mnt. This may further curb the country’s dependency on coal imports in the upcoming years ahead.
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