Chinese coking coal imports tumbled in 2015, reflecting weak demand from the nation’s vast steelmaking sector.
In December imports came in at 4.45 million tonnes, up 9.2% on November, although the year-on-year rate collapsed by 41.6%.
For the entire year imports fell to 48 million tonnes, a decline of 23% on 2014.
Imports from Australia, China’s largest international supplier, fell by 18%, a comparatively strong performance compared to other coal exporters.
The chart below from CBA reveals the recent trend.
Vivek Dhar, mining and energy analyst at CBA, suggests two factors are behind the ongoing decline in import demand.
“The fall in China’s coking coal imports last year reflects weaker steel output growth, a key driver of coking coal consumption, and rising Chinese coking coal supply, which is displacing the need for metallurgical coal imports,” wrote Dhar in a research note released earlier today.
Despite the solid jump in imports recorded in December, Dhar believes that Chinese import demand, along with spot pricing, is likely to remain under pressure in the year ahead.
“In the near-to-medium term, environmental regulations on imports and a new coal rail link between the coal producing province of Shanxi and the steel producing province of Hebei will likely pressure China’s coking coal imports even lower,” says Dhar.
“With demand slowing and traded coking coal markets well supplied, coking coal prices seem poised to remain at these lower levels in the near term.”
The decline in Chinese coking coal imports coincided with a drop in Chinese steel output in 2015.
As part of its Q4 GDP report released earlier in the month, China’s NBS revealed that the nation produced a total of 803.83 million tonnes of crude steel in 2015, down 2.3% from a year earlier.