China’s thermal coal imports will decline by between 10 million and 12 million tonnes in 2019, a leading industry analyst said on Tuesday, largely because of rising domestic output in the world’s top producer and consumer.
China’s coal output will increase from the second quarter of 2019, reducing its reliance on overseas supplies, Rodrigo Echeverri, head of hard commodities at trader Noble Group, told an industry conference in Shanghai.
China is set to produce an additional 100 million tonnes of coal this year, Wang Hongqiao, vice president of China National Coal Association, said earlier at the same event.
“Coal demand for power generation in China will increase but the growth rate of general coal consumption will slow down,” Wang said, leading to a glut of the fuel and “severely disrupting” the market.
China produced 4 billion tonnes of coal in 2018, according to the National Bureau of Statistics. It also added 194 million tonnes in mine capacity that year, despite promising to cut excess capacity for the sector.
The state planner has also approved at least 12 new coal mining projects with a combined annual capacity of 29.5 million tonnes since the beginning of 2019, according to statements issued by the National Development and Reform Commission.
Echeverri said he expected a drop in thermal coal imports this year of 11 percent from 2018 volumes to 197 million tonnes, with the reduction hitting top supplier Australia the hardest.
That comes after traders have already cut back on purchases of both thermal and metallurgical coal from Australia due to lengthy quality checks on supplies from there that have lasted as long as two months at some ports.
Noble Group, once a mighty commodity trader, completed a drawn out $3.5 billion debt restructuring at the end of last year to emerge as a smaller, unlisted coal-trading business focused on Asia.