China's December coal imports surge 25 percent

China's coal imports surged 25 percent to 17.34 million tonnes in December, capping a record month and annual high fuelled by soaring demand from harsh winter weather. December's robust numbers bring China's full-year coal imports to a record 164.78 million tonnes in 2010, a 31 percent jump from the 125.83 million tonnes posted in 2009, China Customs Statistics (CCS) Information Center data showed on Wednesday.
The previous monthly high was 16.4 million tonnes imported in December 2009. Some analysts said the strong surge in imports would set the tone for imports in 2011. Net coal imports for 2010 were 145.75 million tonnes, exceeding analysts' expectations for 133.5 million tonnes, according to a median prediction of 10 analysts polled in late November.
It was not clear how much of December's record imports were coking coal, used by steelmakers, and how much was thermal coal destined for power plants. But cold winter weather in the last two months has strained power supplies and pushed coal stocks at power generators to dangerously low levels in some provinces, while some analysts see steel production growing this month.
China is a superpower of coal production and is traditionally an exporter rather than an importer, so it amazed many in the global coal market when it swung to net imports in 2009, attributed to a campaign to cut back on its most polluting and dangerous mining operations that left it short of supply.
Limited rail capacity, which is already facing severe capacity constraints, has also choked off supplies from the coal-producing northern regions to key demand centres in southern provinces, in turn encouraging coastal cities to import. But China's imports could now be under pressure from surging prices on the Asian market because of floods that have decimated coal production in Australia. However, China is much less dependent on Australian coal shipments than it was a year ago.
This year it has turned to Indonesia, which accounted for more than one third of its imports in January-November, and boosted imports from its neighbour Mongolia, which has taken coking coal market share from Australia. China has also imported much more this year from far-flung suppliers such as South Africa, Colombia and the United States.