China's coal imports are expected to be little changed or decline in 2024 despite an expected increase in overall demand for the polluting fuel, officials from industries, state-run utilities and traders said on Friday.

Tepid growth in shipments by the world's top importer of the fuel could suppress global prices and worsen fears of oversupply, with Indonesia, the world's top exporter of coal, expected to further boost exports from record levels.

Wu Wenbin, head of coal management at utility Guangdong Energy Group, told the China Coal Import International Summit in Xiamen that he expected China's coal imports to range between 450 million and 500 million metric tons this year.

That compared with a 2023 record of 474.42 million tons, surprising analysts who had forecast imports of between 460 million and 470 million tons.

Out of six other industry officials Reuters spoke to at the conference, four of them said they expected imports to remain flat or decline in 2024, mainly due to underwhelming growth in economic activity.

"I am filled with despair about the state of my industry," one of the traders said.

The other two said they estimated an increase in imports as they expect global prices to become more competitive with local prices.

RECORD 2023 IMPORTS

China's record imports and a surprise uptick in shipments by No.2 coal importer India helped balance coal markets in 2023. India's imports are expected to fall in 2024 for the first time since the pandemic year of 2020.

Indonesian coal exports are expected to rise 2.1% to 528.72 million tons, despite expectations for production to fall 8.4% to 710 million, said Hendra Sinadia, of the Indonesian Coal Mining Association.

Sinadia estimated higher exports as he projected a smaller share of output going to meet domestic fuel demand.

Guangdong's Wu expects shipments from Indonesia to China to fall to 200 million metric tons this year, while imports of Australian coal will return to "a normal level" of 80 million tons.

The world's top coal user imported a record 222 million tons of coal from Indonesia in 2023, and 62 million tons from Australia, data from analytics firm Kpler showed.

Despite the largely underwhelming forecasts for imports, total Chinese coal consumption is expected to grow 4% in 2024, higher than the average annual growth of nearly 3% since 2021, Wu said.

However, profits from coal mining and washing in China fell 25.3% in 2023 on the year to 762.89 billion yuan ($106 billion), in line with a fall of 25.5% in domestic spot prices, Wu said.

Wu forecast that the average price of 5,500 kcal/kg coal at northern China ports would further fall to 850-950 yuan per metric ton in 2024, from an average of 970 last year.

China is building a 600-million-ton coal reserve to balance supply and demand and control price fluctuations, he added.

 （Picture: Veer）