Phil Ren

1. CHINA’S COAL SUPPLY &
DEMAND
PHIL REN--PRESIDENT
SINO RESOURCES HOLDINGS GROUP LIMITED
Chairman
China Coal Importers AssociaCon

2. CONTENT
• CHINA’S COAL PRODUCTION
• CHINA COAL demand and import
requirements
• China’s policy changes and their impact on
Coal supply and Demand
• The role of coal in China’s future energy
generaCon

3. Map of china’s coal deposit

4. China’s coal deposit
• There are coal deposits in each province and
auto regions except Shanghai area
• CharacterisCcs: 1. more in the north than in
the south; 2. more in west than in the east; 3.
not evenly spread; 4. long distance
transportaCon from producCon to
consumpCon area; 5. boVlenecks for
transportaCon.

5. 13 Major coal producCon areas
• 1、神：神东、万利、准格尔、 、 、府谷矿区
2、 基地：榆神、榆横矿区
3、黄陇基地： (含永陇)、黄陵、旬耀、 、蒲白、澄合、 、
矿区
4、晋北基地：大同、平朔、朔南、 、河保偏、 矿区
5、晋中基地：西山、东山、汾西、霍州、离柳、 、霍东、石隰矿区
6、晋东基地：晋城、潞安、阳泉、武夏矿区
7、 (东北)基地： 、宝日希勒、伊敏、大雁、霍林河、平庄、白
音华、胜利、阜新、 、沈阳、 、 、七台河、 、鹤岗矿区
8、两淮基地：淮南、
9、鲁西基地： 、 、新汶、枣滕、 、淄博、肥城、巨野、黄河北
矿区
10、河南基地： 、焦作、义马、 、 、永夏矿区
11、冀中基地：峰峰、 、邢台、 、开滦、 、宣化下花园、
北部、平原大型煤田
12、云贵基地： 、普兴：、水城、、六枝、织纳、黔北、老厂、小龙潭、
昭通、 、恩洪、 、古叙矿区
13、宁东基地：石嘴山、石炭笋、灵武、鸳鸯湖、横城、韦州、马家滩；积
家并、萌城矿区

6. Four major areas

7. ProducCon in 2015 and est. 2020

8. 2010-2017 china’s coal producCon
by million tons
year produc*on import export remarks
2017, Jan.-May 1407 133.26 4.65
2016 3364 260 8.78
2015 3750 204 5.33
2014 3874 290 5.74
2013 3974 330 7.51
2012 3945 288.51 9.28
2011 3764 182.4 14.66
2010 3428 166.25 19.03

9. China coal mine’s capacity
• There were 6816 coal mines in China in 2015,
the total number is 5930 coal mines now.
The total producCon capacity is about 5 billion
tons, China’s planning producCon is no more
than 3.9 billion tons by year 2020, small
mines, old mines will be closed and, safety
standard not meeCng the requirements will
be suspended.

10. ProducCon areas

11. Single mines capacity

12. China coal demand
China coal consumpCon is projected at around
4.1 billion tons by year 2020. Coal import will
be around 200-350 million tons per year.
China coal import is Mandatory especially for
coking coal.
• China coking coal producCon capacity is not
able to meet the current demand;
• China coking coal reserves is not enough for
long term consumpCon.

13. China Coal Import requirements
• Elements required for imporCng into China
• CV (Qnet,as) MJ/kg : 16MJ/kg or greater for lignite, 18MJ/kg others
• Arsenic (Asd) : ug/g 80ug/g or less
• Ash : 30% or less for lignite, 40% or less for others
• Mercury(Hgd): 0.60ug/g or less
• Sulphur: 1.5% or less for lignite, 3% or less for others, but
normally controlled under 1%.
• Phosphorus(Pd): 0.15% or less
•
• Chlorine(Cld) 0.30% or less
•
• Fluorine(Fd): 200ug/g or less
•

14. 600 Kilometers
《commercial coal quality requirement》
request that if the delivery distance within
China is more than 600 kilometers, the CV of
lignite at least16.50MJ/kg（3946kal/kg）or
above, other coals at least 18MJ/kg（4300kal/
kg）.

15. Import duty
• Import duty for Anthraccite, coking coal is 3%;
thermal coal 6%, briqueVe 5%.
• At the iniCal stage that the import duty
imposed, it did affect the import volume in
some aspect, but the influence becomes less
important.

16. Import duty
• Since China had signed FreeTrade Agreement
with Southeast Asian Countries, the import
duty does not apply to the coal from
Indonesia, so the coal imported from
Indonesia is sCll 0% import duty. And
Indonesia is the largest coal export source to
China for thermal coal and lignite. Half of
China’s thermal coal and lignite import are not
affected by the import duty.

17. Special requirements
• For Beijing, Tianjin, Hebei and surounding
areas; Yangze River Delta; Pearl River Delta
• Ash（Ad）≥16%、Sulphur（St,d）≥1% are
not allowed.
• Chinese GeneraCng company supporCng the
import coal.

18. China’s policy changes and their
impact on coal supply and demand
• In the year 2012, the coal price was very
volaCle in China market, so as to the rest of
the world.
• Beginning 2013 Cll May 2016, China coal
market only had one direcCon—declining,
coal was over supplying in China, almost all
coal miners were losing money.

19. China’s policy changes and their
impact on coal supply and demand
• By the end of 2014, 40% of coal mining
companies in China losing money。Chinese
government wanted to take the advantage of
over supply to shut down the small mines and
low efficiency mines, but the coal price sCll
not coming back to profitable level. By the
end of 2015, 80% of coal mining companies in
China losing money.

20. China’s policy changes and their
impact on coal supply and demand
• In the first half of 2016, China Central
government and relevant ministries issued 12
policies and regulaCons to control the over-
supply of coal, provincial governments issued 25
policies and regulaCons for the same reason.
• April 12th of 2016, 276 working days policy was
issued, that means 16% of producCon being cut
off, coal price going up from May 2016 Cll now.

21. China’s policy changes and their
impact on coal supply and demand
• As the coal price going up, the second half of
2016, the China government more focus on
work safety and environment control.
• Oct, 2016, 13th five year plan(2016-2020),
which set the coal consumpuCon target as:
China coal consumpCon is projected at around
4.1 billion tons by year 2020. Coal import will
be around 200-350 million tons per year.

22. China’s policy changes and their
impact on coal supply and demand
• First half of 2017, not much policy changes on
coal. But, one policy which was effecCve on July
1st , 12 second Cer ports not allowed to handle
import coal, this policy affecCng Australian and
Indonesian coal import.
• All the policies and regula*ons changes are for
two purposes: 1. control the coal producCon,
shutdown the small producCon scale mines,

23. China’s policy changes and their
impact on coal supply and demand
• Low efficiency mines and low work safety
standard mines. 2. control the consumpCon of
coal, use more renewable energy for beVer
environment.
• The producCon was 3974 million tons in 2013
down to 3364 million tons in 2016, the
domesCc supply was down 610 million tons
per year.

24. The role of coal in China’s future
energy generaCon
• Coal sCll will play an important role in China
energy consumpCon, though wind power and
solar power will be increasing. Coal is 94% of
China’s fossil energy composiCon, gas and oil
together is only 6%.
• As an energy supply in China, coal will be
possibly reduced to 50% from current 65%,
and will not be less than 50% unless there is
revoluConary technology advancement.

25. The role of coal in China’s future
energy generaCon
Future for Coal:
• GasificaCon & coal oil
• Power generaCon and transmission
• Chemical products

26. The End
• Thank you
• Phil Ren
• Email:phil.ren@hkunitedresources.com