SHANGHAI Feb 6 Chinese coal imports will fall
for the first time in five years in 2013, dropping 10 percent
from the year before due to rising domestic supply and an
improved transport network in the country, a Reuters poll
The world's top coal importer accounts for about a third of
Pacific seaborne thermal trade and has a growing influence on
regional markets for the commodity.
Any reduction in the amount of coal it ships in would weigh
on Asian prices, although they would likely be supported by
stronger demand and reduced supply elsewhere in the region.
Total imports are expected to stand at 210.8 million tonnes
in 2013, according to the median estimate of the poll of 12
analysts. Imports surged by about 30 percent to a record 234.3
million tonnes last year as users gobbled up cheap foreign
supply after steam coal sank to a three-year low of $84 per
"Chinese coal prices will be soft this year because of the
increased supplies coming onstream and weak power demand growth.
That will keep the arbitrage window for (most) imports closed,"
said Karen Li, an analyst at Nomura Research in Hong Kong.
Thermal coal imports are expected to fall 15 percent from
the year before to 154.5 million tonnes in 2013. And while
coking coal imports are seen climbing 5 percent to 56.3 million
tonnes, that is still a far cry from last year's 20-percent
Mine consolidation in recent years in the top coal producing
provinces of Shanxi and Shaanxi has bolstered their output,
while the expansion of mines in Inner Mongolia is also boosting
Analysts at Macquarie Bank expect Chinese coal production to
grow 5 percent, or 192 million tonnes, to 3.9 billion tonnes in
2013. Coal demand, however, is only expected to rise 4.3 percent
this year, even as economic expansion gradually gathers pace, it
said in a report last month.
With high inventories of around 20 days at power plants and
the off-peak demand season starting next month, there is scope
for a protracted period of destocking. That means Chinese spot
steam coal prices will stay weak for most of the first half,
before rebounding around May-June as utilities buy ahead of
The median price estimate for spot thermal coal with a
heating value of 5,500 kcal/kg NAR at Qinhuangdao port was 655
yuan ($110) a tonne, down 6.4 percent from 700 yuan last year.
Prices on the state-backed Bohai-Rim Steam Coal Index are
currently at 628 yuan a tonne.
AGE OF THE TRAIN
Improvements to China's coal rail capacity should reduce
bottlenecks in bringing supply from coal fields to key customers
such as utilities powering huge coastal cities.
Analysts said boosted capacity on the key Daqin, Shenhuo and
Houyue railroads, which link coal-rich provinces in the north
and northwest regions to eastern coastal ports and
coal-consuming provinces in southern China, should ease supply
constraints by the second half of 2013.
Capacity will increase by 136 million tonnes in 2013 from
the year before to 1.4 billion tonnes, according to estimates by
CLSA-Asia Pacific Markets.
But even as China retreats from the seaborne market,
economic improvements in Japan, South Korea, Taiwan and India
should support international prices. Reduced seaborne supplies,
after a slew of mine closures abroad and the shelving of
expansion plans in Australia, will also soften the impact on the
market of less Chinese buying.
Growth in imports of coking coal to China, which accounts
for about 18 percent of seaborne trade, will ease on the back of
abundant domestic supplies, as weak steam coal prices prompt
some miners to switch to produce more profitable semi-soft
Sluggish demand growth for steel, hampered by a clampdown in
the real estate market, will also curb appetite for coking coal.
Still, the rise in imports of coking coal to China, albeit
at a slower pace than last year, and to other big steel
producing countries will tighten the market and buoy
"As global steel demand recovers in 2013, this should drive
an improvement in coking-coal prices back to $180 a tonne over
the second half of 2013," CLSA analyst Ian Roper said in a
report late last month.
Hard coking coal is currently trading at about $170 a tonne.
($1 = 6.2328 Chinese yuan)
(Editing by Joseph Radford and Simon Webb)