The boom in China’s coal imports this year has not been accompanied by much improvement on overall tonne-mile demand, BIMCO said in a report today. An increasing number of those cargoes are coming on short-haul voyages from nearby suppliers rather than longer transits.
BIMCO analyst Peter Sand says Australia and Indonesia seeing increased market share for China’s coal cargoes, with fewer cargoes coming from the US and South Africa.
China’s imported coal demand this year has surprised to the upside thanks to a policy change in mid-April that limited domestic mines to only operating for 276 days. The limit was imposed as a measure to start to shrink the country’s bloated industrial sector.
As a result, China’s coal imports in the third quarter reached the highest level since second-quarter 2014.
BIMCO’s Sand notes that in 2013, China was sourcing 23% of its coal from long-haul origins such as the US Atlantic Coast and South Africa, with the remainder coming from Australia and Indonesia. But those long-haul origins now only account for 16% of China’s coal imports.
Other closer sources of coal, such as western Canada and Malaysia, have also emerged as important suppliers. Sand says China has not imported any significant amount of coal from the US and South Africa, since October 2014.
“Despite a solid surge in coal volumes, the demand side of the dry bulk shipping industry will not benefit to the same extent as before,” Sand said. “Since 2014, there has been a change in the coal trade patterns where China has singled out its key distributors and focused increasingly on them. This has brought around shorter sailing distances, due to the proximity of exporters.”
