China coal traders shrug off impact of Indonesia coal export ban due to stockpiles, weak demand
- Coal stocks at key Chinese utilities in coastal regions were about 33 million tonnes as of Saturday last week, 57 per cent more than at the same time in 2021
- Indonesia, the world’s largest thermal coal exporter, announced a shock ban on shipments on Saturday last week to avert domestic power outages.
Coal traders in China, the world’s top consumer and importer of the fuel, are shrugging off a ban on coal exports imposed by Indonesia, saying utilities already hold hefty stockpiles with power demand set to weaken for the Lunar New Year holiday.
Coal stocks at key Chinese utilities in coastal regions were about 33 million tonnes as of Saturday last week, 57 per cent more than at the same time in 2021, data from the China Coal Transportation and Distribution Association showed.
Meanwhile, daily coal consumption by China’s power plants is currently flat versus last year at 2.2 million to 2.3 million tonnes – and expected to slump in the coming weeks when factories shut for the week-long Lunar New Year celebration and as Beijing orders reduced activity to ensure clear skies for the Winter Olympic Games.
“If we are not expecting any [extreme] cold [weather] waves, there would be no other factors to drive up coal demand in the near term,” said one Jilin-based coal trader who declined to be identified.
Utilities in the region are fully relying on long-term contract supplies from domestic mines, and do not need to purchase from the spot market at the moment, he said.