Mongolia's coal exports to China down 8.3% month-on-month in May

According to Mysteel calculations based on cumulative data from the General Administration of Customs of Mongolia, total lignite and coal exports from Mongolia to China in May reached 6.81 million tonnes, down 8.3% from April and down 9.3% year-on-year.

Of this total, 6.56 million tonnes were anthracite, bituminous and other coal, down nearly 6% from April. Lignite exports (a low-grade coal mainly used for power generation) to China alone were just 252,416 tonnes, down sharply from 459,001 tonnes the previous month, according to Mysteel calculations.

Mongolia’s coal exports fell in line with a 4.7% month-on-month decline in China’s total coal imports from the global market last month, Mysteel reported. Data from the General Administration of Customs of Mongolia shows that nearly all of Mongolia’s coal and lignite exports are destined for China.

Oversupply of coking and thermal coal at domestic mines and traders in China has forced Chinese importers to cut back on coal purchases from most foreign suppliers, including Mongolia, according to data from the General Administration of Customs of China (GACC).

Meanwhile, transactions involving Mongolian coal also fell sharply as the price competitiveness of this type of coal compared to domestic Chinese coal continued to weaken, according to Mysteel.

In response, Mongolian coal inventories at China-Mongolia border crossings surged in May. For example, at GACC bonded warehouses in Ganqimaodu port (Inner Mongolia, northern China) – the main transit point for Mongolian coal into China – inventories rose from around 3.35 million tonnes on May 6 to over 4 million tonnes on May 30, according to data from Mysteel.

The lackluster trading activity has dragged down Mongolian coal prices, with the most popular grade at Ganqimaodu – Mongolian No. 5 crude coal – falling steadily during the month, closing at 735 yuan ($102.50) per tonne on May 30, down 100 yuan from the same time last month, according to Mysteel. However, the decline was not enough to boost trading volume, according to market sources.

As of June 25, Ganqimaodu No. 5 crude coal prices continued to fall by 15 yuan per tonne to 720 yuan per tonne, according to Mysteel data.

Source: Mysteel