China’s Q1 coal imports were 80mt (including lignite), up 29.9% from 61.61mt in Q1 last year, according to preliminary statistics from customs.

The figure includes 16.21mt of brown coal, which surged 46% from 11.12mt in the same period of last year.

Steam coal arrivals came to 36.96mt over the period, up from 29.09mt in Q1 last year. Coking coal imports rose to 17.19mt, from 12.19mt in the same period of last year, meanwhile anthracite arrivals climbed to 9.64mt from 9.21mt.

March imports came to 26.15mt (including lignite), up from 23.3mt in February and 24.1mt in March last year. Excluding lignite, the figure is 20.52mt, up from 18.82mt in February and 19.79mt in March last year.

Steam coal arrivals came to 12.1mt, up from 9.71mt in February and 9.14mt in March last year. Coking coal imports dropped to 4.64mt from 5.4mt in February, but still higher than the 4.14mt imported during March last year. Anthracite arrivals climbed to 3.78mt from 3.01mt in February, but dipping from 3.78mt in March last year.

Performance across the next couple of months is predicted to be relatively stable, as traders have been cautious about signing up deals recently, with the Chinese domestic market having continued to soften for several months.

Insiders are uncertain about demand in the summer, following the Q1 statistics showing economic recovery had been below expectations, while leading indicators for April suggest the low demand has continued into the month.

In light of this, few major deals were agreed upon at the April Coaltrans conference in Beijing, in contrast to last year when players booked 2-3mt each, which led to defaults later in the year with the fall in consumption and the rise in hydro output.

It’s predicted that the bearish sentiment will last throughout Q2. Domestic prices may stabilise in the near future though, with demand set to climb in south China where summer has already begun. Air-conditioning demand in the rest of China will not kick off until next month.

A pick-up in industrial power demand, however, may take longer.

For coking coal, the situation looks more bearish at the moment, with steel prices crashing and production predicted to fall.

Despite this, China’s power groups still anticipate import increases for this year. Huaneng is aiming towards 30mt, up from around 20mt imported last year, while Guodian plans to lift the tonnage from 11mt in 2012 to more than 30mt. Datang and Shenhua, with imports of 18.89mt and 24mt respectively last year, are also seeking to boost performance.

The power groups were informed by domestic miners in mid-April that the RMB10/t ($1.60/t) discount on contract supplies had been removed, indicating prices will be purely settled in accordance with spot prices. This means generators have to diversify supplies to get prepared for droughts, extreme weather or incidences that may disrupt domestic transport.

As it stands, more players have realised further steep declines in domestic and import prices are unlikely, with the Daqin line maintenance having caused a sharp fall in port stocks.

More information can be found in the McCloskey China Coal Report which presents monthly updates on both the producer and consumer sides of the Chinese coal market. With information on trade, transport and policy updates, the McCloskey China Coal Report provides comprehensive coverage for anyone dealing with the Chinese coal market.


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