Name: China coal short-term outlook January 2023
Brand: Wood Mackenzie
SKU: 150335
Price: 5000 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Commodity Market Report 06 February 2023

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Report summary

The coronavirus pandemic affected China’s economy again in December. However, the recovery of some key economic indicators – domestic consumption, manufacturing PMI, and others – shows that the economy is recuperating. Far from boosting the economy though, coal prices fell because of record-high coal inventory at ports at the end of January. We expect the high stock levels will persist in dragging the price down in February. The reviving economy will be the first driver of coal prices in the coming months. Price weaknesses also emerged in the coking coal market, as companies completed their restocking and the transactions were scarce. High expectations for the recovery of steel demand encouraged steel mills to maintain high operating rates. We expect the high operating rates to support the coke and coking coal prices in February before real demand is tested after March.

Thermal demand: economic activity is recuperating from the coronavirus pandemic
Met demand: high hopes for steel demand-supported price recovery; yet, questionable
Coal production in 2022 hit a record high of 4.5 Bt
2023 supply will reach another high
Thermal imports: China imported 208 Mt of seaborne thermal coal in 2022
Met imports: the arrival of Australian cargoes will reshape import shares but will be limited in 2023
Thermal price: record high coal inventory led to a price fall at the end of January
Strong expectations of increasing coal demand in 2023 cannot stop the coal price from falling
Met price: post-holiday buying interest to reverse the short-lived price decline

Tables and charts

This report includes the following images and tables:

Monthly coal-fired power generation (TWh)Monthly hydro-power generation (TWh)Monthly throughput at Qinhuangdao port (Mt)

Monthly throughput at Huanghua port (Mt)Monthly hot metal production (Mt)Monthly metallurgical coke production (Mt)China’s monthly coal output (Mt)Thermal coal supply (Mt)Metallurgical coal supply (Mt)Key thermal coal prices: history and forecast (USD/t)Hard coking coal price arbitrage at Tangshan steel mill (USD/t nominal)