China, the world’s largest buyer of coal, cut its September imports by 6% from a year earlier, customs data showed on Wednesday, as solid domestic inventories reduced demand while export constraints in Indonesia, a key supplier, tightened availability.
September’s total of 43.37-million metric tons was down from a year earlier but up from 42.09-million metric tons in August.
“(The) inventory level at coastal power-generating companies is higher than previous years mainly owing to less cooling demand due to a relatively cool summer,” said Penny Chen, senior director at Fitch Ratings.
China’s fossil-fuelled power generation fell 4.3% in August from a year earlier, the most recent statistics bureau data showed, as rising hydropower, nuclear and renewable output cut into coal’s share.
Supply-side factors in top supplier Indonesia also played a role, said Jenny Huang, senior director at Fitch Ratings.
“Ongoing RKAB-related production planning and approval adjustments have affected export availability, while low river water levels in [Indonesia’s] Kalimantan also disrupted coal logistics.”
All miners in Indonesia are required to submit an annual production plan, or RKAB, for approval by the government, which sets output quotas.
In the first nine months of the year, China’s coal imports rose 2.2% to 353.54-million tons, the data showed.
Shipments surged in June and July after a deadly accident at Shanxi’s Liushenyu mine in May prompted widespread safety inspections in the key coal-producing province.
With many mines suspending output, buyers turned to imports to fill the gap, temporarily swelling imports.
