Amid expectations of little to no change in China’s coal imports for the year 2024, industry officials and experts anticipate a stagnant or declining trend despite an overall rise in demand for the environmentally harmful fuel. This projection, shared by key figures from various sectors including industries, state-run utilities, and traders, could potentially impact global coal prices and exacerbate concerns of oversupply in the market. Notably, Indonesia, the world’s leading coal exporter, is poised to escalate its exports from previous record levels, further influencing the dynamics of the international coal trade.
At the recent China Coal Import International Summit in Xiamen, Wu Wenbin, the head of coal management at utility Guangdong Energy Group, forecasted China’s coal imports to hover between 450 million and 500 million metric tons throughout the year. This estimate comes in the wake of a record import figure of 474.42 million tons in 2023, surprising analysts who had initially predicted a slightly higher range for 2024. While a majority of industry insiders at the summit expressed pessimism regarding import trends due to lackluster economic growth, a minority foresaw a potential uptick in imports driven by anticipated shifts in global price competitiveness.
Despite China’s record-breaking import volumes in 2023 and a notable increase in coal shipments from India, the second-largest coal importer, the outlook for 2024 remains mixed. While India is expected to witness a decline in coal imports for the first time since 2020, Indonesia is set to boost its exports by 2.1% to 528.72 million tons, even as production levels are projected to decrease. This discrepancy is attributed to an anticipated reduction in domestic fuel demand within Indonesia, leading to a higher proportion of coal output being allocated for exports.
Looking ahead, Wu foresees a decrease in coal shipments from Indonesia to China, settling around 200 million metric tons this year, while imports from Australia are anticipated to normalize at approximately 80 million tons. Notably, China’s significant coal imports from Indonesia and Australia in 2023 underscore the country’s reliance on foreign sources to meet its energy needs.
Despite the somewhat subdued outlook for coal imports, overall Chinese coal consumption is projected to grow by 4% in 2024, surpassing the average annual growth rate observed since 2021. However, challenges persist within the domestic coal mining sector, with profits from mining and washing operations witnessing a notable decline in 2023 alongside a corresponding drop in spot prices. Wu further predicts a decrease in the average price of coal at northern China ports for the upcoming year, reflecting ongoing market dynamics and economic factors.
In a bid to stabilize supply-demand dynamics and mitigate price fluctuations, China is actively constructing a massive 600-million-ton coal reserve, underscoring the nation’s strategic approach to managing its energy resources amidst evolving market conditions.