ARKANSAS, Nov 27 (Future Headlines)- The global thermal coal market is witnessing significant shifts in trade dynamics, with China’s imports set to reach the second-highest monthly total for 2023 in November. This surge in demand, driven by increased arrivals from Indonesia, the world’s leading exporter of thermal coal, is influencing prices and reshaping trade patterns in the Asian coal market. This analysis explores the key elements and statistics surrounding China’s import trends, the impact on prices, and the consequential adjustments in coal trade dynamics among major players such as India and Australia.

In November, China’s thermal coal imports are projected to reach approximately 29.21 million metric tons, a notable increase from October’s 24.62 million tons and the second-highest monthly total for the year, following May’s 30.21 million tons.

The surge in imports is attributed to increased arrivals from Indonesia, the largest exporter of thermal coal globally. Kpler estimates that China will receive around 18.03 million metric tons of Indonesian coal in November, up from 16.70 million tons in October.

China’s appetite for Indonesian coal, known for its relatively low sulfur content, is contributing to a rally in prices. The assessed price for coal with an energy content of 4,200 kilocalories per kg (kcal/kg) reached $58.94 per metric ton for the week ending November 24, marking a 17% increase from the low observed earlier in the year.

The higher prices for Indonesian coal may be influencing India, the world’s second-largest coal importer. India’s thermal coal imports are expected to decrease to around 17.78 million metric tons in November, down from 18.82 million in October, which was the strongest month in 2023.

While imports from Indonesia to India are expected to decline, thermal coal imports from Australia are forecasted to remain steady in November, signaling a potential shift in preference and a larger share for Australia.

Indian utilities, particularly interested in the 5,500 kcal/kg grade, have turned to Australian thermal coal. The forecasted arrival in November is 1.11 million metric tons, slightly higher than October’s 1.02 million tons.

Australian thermal coal linked to the Argus assessment for 5,500 kcal/kg fuel is assessed at $93.12 per metric ton for the week ending November 24. While this grade has seen a decline from its recent peak, it remains above its September low.

China, like India, has increased purchases from Australia, preferring the same grade (5,500 kcal/kg). China’s estimated thermal coal imports from Australia in November are 7.22 million metric tons, a significant uptick from 4.23 million in October and the highest monthly total since the end of the informal ban on Australian imports at the beginning of 2023.

The increased imports to China surpass volumes typical before the mid-2020 ban, showcasing a substantial shift in trade dynamics. China’s heightened appetite for imported thermal coal is potentially impacting India’s market, leading India to explore alternative suppliers.

India is turning to South Africa for larger coal volumes, with estimated imports in November at 2.67 million metric tons, a slight decrease from October but an increase from previous months. This trend suggests a diversification of supply sources by India.

South Africa, a swing supplier to both the Atlantic and Indian basins, has seen increased availability of its coal in Asia due to declining coal imports in Europe. The shift has allowed South African cargoes to cater to the rising demand from Asian buyers.

South Africa exported 3.74 million metric tons to Asia in October, compared to just 386,860 tons to Europe. This contrasts with the same period in 2022, indicating a notable shift in trade patterns.

Reporting by Moe Khaled; Editing by Sarah White