In the first quarter of 2009, China became a net importer of coals. The significant increase in China's coal imports, according to analysts, may be attributed to the domestic supply shortage caused by frequent coal mine accidents and also to the decline of international coal prices.
During the period in question, China only exported 7.38 million mt of coals, down 27.6 percent compared with the 10.20 million mt exported in the same period last year. In contrast, China imported 13.59 million mt in the first quarter of 2009, up 20.1 percent over the 11.26 million mt imported in the same period last year.
As of April 10, the price of steam coal at Newcastle port, Australia, was at the level of $63.24/mt, down $130/mt compared with the peak price in July 2008. Meanwhile, the price of steam coal (5800 kca/kg on the same date was around RMB 590/mt, which was RMB 150/mt higher than the international coal price.
Due to the frequent occurrence of coal mine accidents in China, domestic supply has been declining significantly. The authorities in Shanxi have been conducting one-year rectification works for safer production at mines in this major Chinese coal-producing province. Some mills in Shanxi have already halted production to carry out safety inspections. Current shipments of coal from Shanxi have declined by over 20 percent year on year, with inventories at Qinhuangdao Port down by 11.6 percent over the same period. As a result, it seems certain that the Chinese coal market will face a supply shortage in the near future.
If the current trend continues, China's increasing volume of coal imports is likely to have the effect of pushing up global coal prices.