By Clyde Russell
LAUNCESTON, Australia- China and India lifted imports of seaborne thermal coal to three-month highs in March as the world’s two biggest buyers took advantage of lower international prices of the fuel to meet strong domestic power demand.
China, the world’s biggest coal producer and importer, saw arrivals of seaborne thermal coal of 29.7 million metric tons in March, according to data compiled by commodity analysts Kpler.
This was up from 23.03 million tons in February and was also higher than the 28.62 million in March 2023.
For the first quarter, China’s seaborne imports of the grade of coal used mainly to generate electricity were 80.64 million tons, up 17.2 percent from the 68.82 million recorded in the same period in 2023.
The strength in China’s imports is being driven by a combination of strong growth in power demand and by seaborne prices being competitive with domestic coal.
Official data showed China’s power consumption was 11 percent higher in January and February this year compared to the same months in 2023, and power generation rose 6.9 percent in 2023, outpacing the 5.2 percent growth rate for the economy as a whole.
China’s electricity demand is being boosted by a variety of factors, including increasing electrification of the vehicle fleet, higher demand from air conditioners and appliances, and increased electrification of industrial processes, such as some types of smelting.
A drop in hydropower output amid drought has also boosted fossil fuel generation, predominantly coal-fired, further lifting demand for the fuel.
China’s domestic coal prices have also remained relatively high with thermal coal at Qinhuangdao ending at 825 yuan ($114) a ton on Monday.
While this is down from a recent peak of 940 yuan on Feb. 27, the prices of seaborne grades popular in China have also been declining.
Australian coal with an energy content of 5,500 kilocalories per kilogram (kcal/kg) as assessed by commodity price reporting agency Argus, slipped to $87.37 a ton in the week to March 28, down from the recent high of $96.66 in the seven days to March 1.
Indonesian coal with an energy content of 4,200 kcal/kg ended last week at $55.70 a ton, down from the recent high of $58.17 from the week to March 8.
Even allowing for freight costs, Chinese import duties and differences in energy content, imported seaborne grades are currently slightly cheaper than domestic supplies, especially for utilities in China’s southeast.
