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| China to face more competition in Indonesian coal market: ICMA |
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| News Source：http://www.jinchemical.com/
; SendDate：2011-4-15 17:15:11 |
China's Indonesian coal imports are expected to reach 52 million mt in 2012, a rise of 20% on the 42.9 million mt of coal exported by Indonesia to China in 2010, according to Indonesian Coal Mining Association chairman Bob Kamandanu at the ninth Coaltrans China conference in Beijing, April 13.
But Kamandanu said Chinese coal buyers were likely to encounter increased competition for Indonesian coal supplies with buyers in other Asian countries entering the market in the short term, and Indonesian domestic buyers in the longer term.
Indonesian coal exports to China have expanded at a rapid rate since registering at 1.4 million mt in 2004, and are forecast by the ICMA to hit 47 million mt in 2011.
Indonesia produced 325 million mt of coal in 2010, of which 265 million mt was exported and 60 million mt sold into domestic consumption.
In the present year, Indonesian coal production is forecast at 335-350 million mt while exports are tipped to hit 270-285 million mt, Kamandanu said.
Export demand was seen to co-exist with domestic consumption during the current decade, although China is expected to face greater competition for Indonesian coal from buyers in other Asian nations in the next few years.
"There is no competition with domestic demand because it has been very slow in Indonesia. Competition is coming from other countries like South Korea and India," Kamandanu staid.
"We are expecting domestic consumption will pick up significantly from 2020 onwards," he told the conference. LONG-TERM CONTRACTS
India was a major purchaser of Indonesian coal last year, taking 42 million mt in 2010, while other top buyers included Japan, South Korea and Taiwan.
Chinese coal buyers were advised by Kamandanu to consider entering into longer-term contracts as a way of ensuring security over their supplies of Indonesian coal.
"Most Chinese buyers use spot contracts, which are one year or less," he said.
Chinese buyers also tend to buy Indonesian coal on a delivered price basis CFR China and are adept at securing discounts to prevailing market prices, Kamandanu said.
"Chinese buyers need to enter into longer-term contracts and apply more competitive prices by trading on international indices," he said.
Deeper commercial relationships between Chinese coal buyers and Indonesian coal companies could be another way for Chinese buyers to lock-in supplies of coal.
"The partnership between China and Indonesia needs to be extended beyond buying coal to investing in infrastructure and coal-mining assets," said Kamandanu. |
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