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Major coal-producing countries push for sales to China

China has been ramping up the production and transportation of coal, along with oil and gas as well as renewables, to cope with the winter peak season for electricity. China State Railway Group Co transported 118 million tons of thermal coal from November 1 to 26, up 34.6 percent year-on-year. Photo: VCG

Multiple coal-producing countries are pushing for sales to China, the world’s largest coal buyer that has just overcome a power shortage a couple of months ago. Coal exporters in Russia, Indonesia and Mongolia are all taking steps to enhance cooperation with China now.

On Monday, 12 Chinese coal import enterprises signed the initial batch of medium- and long-term thermal coal supply contracts for 2022 with 12 coal export enterprises from Russia, Indonesia and Mongolia during the 2021 China Import-coal Summit held in Beijing.

The first batch of contracts is valued at $2.49 billion. Coal exporters in the three countries will supply 25.82 million tons of thermal coal to China.

Han Jianjun, an industry insider in Ordos City of North China’s Inner Mongolia Autonomous Region, told the Global Times that China’s overall coal import volume in 2020 was 300 million tons, and these contracts represent nearly 10 percent of the nation’s annual coal imports.

According to statistics from the General Administration of Customs released on December 7, China imported 292.3 million tons of coal in the first 11 months of 2021, a year-on-year increase of 10.64 percent.

“Due to multiple factors including the pandemic, weather and geopolitics in global coal markets, China’s coal import volume in 2022 is difficult to predict, but it might be comparable to this year,” said Han.

As one of China’s major coal providers, Russia supplied 47.58 million tons of coal in the first 10 months of 2021, accounting for 18.57 percent of the overall import coal volume, said Liu Haitao, a coal analysis and certification expert of the SGS Group, at the summit.

Liu said that with the center of global coal use turning to Asia, Russia will shift its energy exports to the Asia-Pacific region amid a reduction of European coal demand. Russia is also planning to reconstruct railways linking its Far East to China.

In terms of coking coal, Mongolia’s exports in 2021 were affected by the uncontrolled COVID-19 pandemic. Zhang Juntian, deputy general manager of the Xiamen Xiangyu Group, said.

Zhang revealed that Ganqumaodu Port, one of the largest coal import channels between China and Mongolia was closed several times due to the pandemic and the number of daily passes for transport vehicles was capped below 200, far below 600 to 1,000 vehicles on normal days.

Zhang noted that the governments of China and Mongolia agreed to boost bilateral trade along the border and plan to empty existing coal stocks in Chaganhada, on the other side of Ganqimaodu Port, by the end of February 2022. In addition, multiple pieces of unmanned transport equipment including automated guided vehicles and container-hoisting facilities will be deployed in multiple ports that connect Mongolia, to reduce the risks of infection for workers.

China’s demand is essential for the global coal market, as world coal trade volume fell by 6 percent year-on-year, said Wang Pengbo, executive director of the China Coal Import and Export Professional Committee.
Source: Global Times

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