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China coal imports seen flat in 2024, State-run utility says

8th March 2024

By: Bloomberg

  

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XIAMEN - China's coal imports are expected to be little changed in 2024, despite expectations for an increase of 4% in demand for the polluting fuel, a senior executive of a State-run utility said on Friday.

Tepid growth in shipments by the world's top importer of the fuel could suppress global prices and worsen fears of oversupply, with Indonesia, the world's top exporter of coal, expected to further boost exports from record levels.

China's coal imports would range between 450-million and 500-million metric tons this year, said Wu Wenbin, the head of coal management for the utility, Guangdong Energy Group.

That compared with a 2023 record of 474.42-million tons, surprising analysts who had forecast imports of between 460-million and 470-million tons.

China's record imports and a surprise uptick in shipments by No.2 coal importer India helped balance coal markets in 2023. India's imports are expected to fall in 2024 for the first time since the pandemic year of 2020.

Indonesian coal exports are expected to rise 2.1% to 528.72-million tons, despite expectations for production to fall 8.4% to 710-million, said Hendra Sinadia, of the Indonesian Coal Mining Association.

Sinadia estimated higher exports as he projected a smaller share of output going to meet domestic fuel demand.

Guangdong's Wu expects shipments from Indonesia to fall to 200 million metric tons this year, while imports of Australian coal will return to "a normal level" of 80 million tons.

The world's top coal user imported a record 222 million tons of coal from Indonesia in 2023, and 62 million tons from Australia, data from analytics firm Kpler showed.

Total Chinese consumption of coal is expected to grow 4% in 2024, higher than last year's 3.5%, Wu said, adding that surging coal demand this decade has helped snap a seven-year lull in consumption.

However, profits from coal mining and washing in China fell 25.3% in 2023 on the year to 762.89-billion yuan ($106-billion), in line with a fall of 25.5% in domestic spot prices, Wu said.

China is building a 600-million-ton coal reserve to balance supply and demand and control price fluctuations, he added.

Profits for China's top 10 generators of coal-fired power rose to 18.3 billion yuan in 2023, though nearly two-fifths of coal-fired power companies booked losses last year.

Still, there was "an overall improvement in the operating situation" of coal-fired utilities, with power tariffs increasing 20% in 2023, Wu said.

Edited by Bloomberg

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