In the first 10 months of 2018, China imported 56.9 million tons of coking coal, down 1.6 percent from a year earlier. Imports in October alone reached 6.08 million tons, up 15.7 percent from a year earlier, according to the Customs Department of China. 

China’s coking coal imports have been steadily declining since July. However, steel output is still high in relation to the Chinese government’s expansion strategy. This has postponed China’s decline in imports, according to the predictions of ‘Morgan Stanley’. The average price of metallurgical coal is equal to USD 196 this year, and it is expected to reach USD 155 next year. ‘Morgan Stanley’ emphasized that Australia’s metallurgical coal supply is expected to increase in the coming year. For instance, ‘BHP Billiton’ is expected to increased its annual coal output by four million tons and ‘Qcoal’ group plans to supply two million tons of coal annually from its ‘Byerwen’ mine. Furthermore, coking coal production will reach 10 million tons per year. 

Mongolia exported 31.3 million tons of coal in the first 10 months of this year, up 10.3 percent over the previous year. Mongolia expected to export 42 million tons of coal next year. The Ministry of Finance estimates the average coal price to be USD 75.9 per ton in 2019. This month, the China Development and Reform Commission has decided to restrict coal imports. 

In addition, the Bank of Mongolia raised its policy rate by one percentage point on Tuesday, saying that “China has restricted its coal market, which has a negative impact on the balance of payments and the pressure on the tugrik.” However, Mongolia’s coal exporters are optimistic about the next year.

Source: BloombergTv.mn