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In 2017 Mongolia's Market Share of Coal Export in China Is Expected to Continue

October.16 Coke Coal

On September 7, "In 2017 The Seventh Mongolian Coal Trade and Investment Conference" was solemnly opened in Shangri-La Hotel in Ulaanbaatar hot.
Chen Weiquan, the Vice Chairman of Fen Wei Energy, gave an opening speech at the conference. Mr. Chen pointed out that Mongolia owned abundant coal resources, and its proven reserves reached 37 billion tons. Mongolia coal resources include a large number of quality coking coal, which is suitable for producing high quality coke.

In recent years, Mongolian coal exports have been growing, mostly to China. Last year, nearly 40% of China's coking coal imports from Mongolia. Mongolia is China's second largest coking coal supplier, and last year its export volume is only 12% lower than the first major country, Australia.

At present, China will continue to limit domestic coal production by cutting excessive industrial capacity and checking coal mine security. The increasing follow-up domestic demand will require more imported coal. Therefore, this year the Mongolian coal export share is expected to maintain, or even further increase.

Overall, the Mongolian coal industry keeps a good momentum. Currently high coking coal prices is favorable to Mongolian miners, but they also face challenges. Chairman Chen pointed out that in order to increase exports, Mongolian coal should be more competitive in the international market. For example, companies can further improve production efficiency, reduce production costs, and build international brands.

In addition, the current infrastructure also limits Mongolian coal to expand market share to China and other countries. After completing the construction of the railway to a China’s port, the logistics costs will decline, then the profits and competitiveness of Mongolian miners will be greatly improved.

It is the People's Government of Bayan Nur City said that, as of September 4, 2017, coal import across Port Ganqimaodu reached 129.21 million tons, exceeding the annual volume of imported coal in 2016.

Port Ganqimaodu is the largest land port used for coal trade between China and Mongolia. In the first half of 2017 Mongolia coal trade value across the port reach 867 million US dollars, accounting for 67.73% of total.

China's customs data showed that influenced by China's ban on North Korean coal imports, the first half of this year, Mongolia's coking coal exports to China grew by nearly 60%, reaching 14.5 million tons. Mainly affected by the Nadamu Festival, in July China's imports from Mongolia only about 1.7 million tons.

However, since mid-July, the clearance time in Port Ganqimaodu has been extended, so in August Mongolia coal imports may further decline. In late August, Reuters reported that both China and Mongolia are actively communicating on this issue. If this problem can not be quickly resolved, in the second half of 2017, the Mongolian coal export to China across Port Ganqimaodu will be significantly reduced.

It is said that the current daily customs coal truck is maintained at 500-600, far below the normal level of 1000 or more. What’s more, it takes 10-12 days for a round-trip time from the coal mine to the port, while it normally takes only about 3 days.