China’s thermal total coal import in 2017 is expected to surge by about 30 million mt over that in 2016, on the back increasing power generation, according to Noble Group.

“The fundamentals in the coal market changed last year,” Rodrigo Echeverri, head of Noble Group’s energy coal analysis, said at the Coaltrans Conference in Shanghai on Monday.

He said that there has been a demand shock in the thermal coal market without a supply response, which has helped support the prices. China’s thermal coal import during the first quarter of 2017 was about 12 million mt more than Q1 2016’s imports, Echeverri said.

He pointed out that China’s thermal power generation in Q1 2017 increased 7% over Q1 2016’s, while output of coal increased by only about 4%.

“Import of coal is very important for power producers and cement manufacturers in South China and they don’t have a ceiling on imports,” said Hu Bo, deputy general manager at Beijing Datang Fuels Co. The seaborne market is going to see more low-calorific-value coal being moved, which is expected to grow to 1.1 billion mt by 2030, according to Cameron Tough, head of International Marketing at Adaro Indonesia. COAL GREEN REVOLUTION

Most of the market participants at the Coaltrans Conference were of the opinion that the coal sector was not a sunset industry.

“We need development to burn coal more efficiently and reduce emissions. This will be the green revolution for coal,” said Mao Zhongsheng, chairman of China’s Shenhua Energy Co. Ltd., adding that fossil fuels would continue to play an important part in the energy-mix. “[The] Asia Pacific region has the biggest scope for growth in energy consumption,” he said, mentioning that additional uses of coal are also being invented, with liquefaction being one of them.

Source: Platts