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Himfr.com reports China will make this year a net importer of coal

Metallurgical coal imports surge

Li Jing said China September coal imports reached 1,255 million tons, compared with 6.6% growth in August, to resume an upward trend. The first quarter of 2009 to the third quarter, net imports rose by 2200% chain. Because domestic coal demand, especially from the power plate demand is growing faster growth in the fourth quarter, JP Morgan expects coal prices to rise. Qinhuangdao Port coal currently inventory hovering at 400 million tons, substantially lower than the first half of 2009 the average level of 5.4 million tons.

This year, China has become an important importer of metallurgical coal to the volume of imports in August compared with same period last year has been up 10 times. Part of the reason leading to this rising output in China who supply a disproportionate share of the closure of small coal mines, but the fundamental reason is that China's domestic metallurgical coal, high-end product supply is limited. The near-term support domestic prices, long-term dependence on imports increased due to several factors: First, pick-up in demand for electricity; second is supply-side constraints; third decline in the port inventory; 4 is a low-bulk freight; 5 is the structure of coking coal shortfall; 6 deposit of rail transport bottlenecks.

From the perspective of electricity demand, China's power generation growth in the past few months has been accelerated in September grew 10.24 percent, despite a slight decline compared with August. Comparison base last year, year on year growth in the coming months is likely to accelerate. At the same time, China's largest coal-producing province of Shanxi Province, after the integration of small coal mines, the domestic production of slower-than-expected recovery rate. For example, the Shanxi provincial government original target of coal production this year remained at 2008 levels of 650 million tons, which requires from September to December the monthly average output of 68.7 million tons. However, the coal output in September to 57.2 million tons, while compared to August of 58 million tons, in July of 59.1 million tons.

And because the tight supply, China's major coal ports in coal stocks to October 20 fell down 4.26 million tons, down from 15.9% since the end of 8. The recent decline also reflects the power plant in the October golden week ago and before the arrival of the winter increase in demand for coal reserves. If there is no considerable supply response, rising winter demand may lead to the port inventories decline further.

Lower freight costs to stimulate the import of

In addition, the relatively low freight rates have also stimulated imports - Baltic Dry Index (BDI) from June to October 23 the peak of the period fell 26.3%. Despite the rebound in freight rates over the past 3 weeks, but the projected delivery of new vessels will be limited space for the recent rise in sea freight. The September and October, from Datong to Qinhuangdao, the Datong-Qinhuangdao railway maintenance work on the transport of coal caused by the interference.

In 2009 China's coal imports more than 100 million tons will not be a problem, of which about 20% will be coking coal. Taking into account the momentum of economic development and power generation, building materials and iron and steel industry, the impact on demand, China's coal imports is still much room for growth. To enhance energy security and to limit carbon emissions, China's investment is being made towards a new energy structure, the proportion of energy from the current 9% to 2020 by 15%. However, according to IEA forecast that China alone power generation in this section of the coal demand in 2030 will be increased to 3.5%, while the United States over the same period was only 0.7%. This means that by 2030, China's annual net imports may reach 80 million -1 billion tons.