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China’s largest coal importer turns net exporter

China's largest coal miner Shenhua turned a net exporter of coal in 2015 from a net importer, according to a report by the global energy think­tank Institute of Energy Economics and Financial Analysis (IEEFA).

This assumes importance as China has been the largest importer of coal until now, which helped firm up the prices of coal. With China turning a net exporters, prices are expected to fall and may touch new lows. Shenhua's coal output fell 8.4% in 2015, according to its latest operational data released to the Hong Kong Stock Exchange. Coal sales fell 17.9% while imports plunged 97.1% to just 200,000 tonne. The company did not import any coal in December. With 1.2 million tonne of coal exports, the company became a net exporter of coal for the first time.

"With Shenhua owning its own dedicated in­house rail and coal port infrastructure (in fact, the largest coal port in the world) and with the company reporting a significant net cash profit margin on its in­house coal production, there is scope now for an acceleration of coal exports from China in the face of continued declines in domestic demand," IEEFA's Tim Buckley said in the report. Shenhua's port at Huanghua handled 111.6 million tonne of coal in 2015, down 15.2% from the year ago, while its coal dock at Tianjin handled 40.3 million tonne of coal, up 10.1% from the previous year.

Source: Economic Times