Daily Management Review

North American coal floods China


10/26/2021


US and Canadian coal miners are actively increasing their share in China's coking coal market, according to Chinese customs statistics cited by Argus.



pixabay
pixabay
For the first nine months of 2021, US shipments increased by 870.6% to 7.2 mln tonnes, while Canada increased by 92% to 6.6 mln tonnes. Russian coal miners also showed a 77.4% increase to 7.7 million tonnes. Meanwhile, in September the US, which a year ago did not supply coking coal to China at all, came out on top among exporters, supplying 1.46 million tonnes and overtaking Russia (927 thousand tonnes).

The market change comes amid an unofficial ban on Australian coal imports imposed by the Chinese authorities. In 2020, Australia was the absolute leader in coking coal exports to China, supplying 35.37 million tonnes out of 72.57 million tonnes of total imports. Since the ban, Australian coal export flows have gone to Japan, South Korea, India and Vietnam.

Another major supplier to China, Mongolia, is unable to take advantage of the market opportunities that have opened up. Mongolian coal imports to China fell 35.8% to 10.6 million tonnes in the first nine months of 2021. At the end of August, writes Argus, the new COVID-19 cases stopped the movement of coal trucks across the Mongolian-PRC border. After customs clearance resumed, the number of trucks passing through remains limited.

Coking coal prices in China are already clearly overheated and have reached incredibly high levels. MMK's steel market report stated that prices in China's domestic market have reached $510-520 per tonne. Meanwhile, coking coal futures have been declining in recent days due to the Chinese government's statements about possible interventions, as well as its attempts to stimulate domestic production.

source: reuters.com