Coal market participants in China are closely monitoring what impact a new outbreak of COVID-19 in Mongolia might have on the country’s coal exports – a crucial concern given that China is the destination of almost all Mongolian coal for export.
Last Thursday, the Ulan Bator government imposed a national lockdown after a locally transmitted COVID-19 case was identified, and as of Monday morning, three new cases had been recorded after 1,818 tests were carried out nationwide, according to the head of Mongolia’s National Center for Communicable Diseases.
Mongolia’s efforts since earlier this year had spared the landlocked country the worst of the global pandemic, Mysteel Global notes.
Due to the new wave however, the Mongolian government has temporarily closed some of the country’s checkpoints with Russia, though the major Mongolia-China checkpoints remain opened, Mysteel Global understands from government posts.
“Due to the possible impact to the economy during the pandemic, specialized (virus) inspection agencies at the border are working as quickly and continuously as possible” to detect anyone who might be infected, noted a report by Mongolia’s government-backed Montsame agency on November 14.
During last Friday, Mongolia exported 1,425 trucks or 138,602 tonnes of coal to China, according to the news agency’s data.
“Major China-Mongolia border checkpoints for coal trade are still in operation, despite Mongolia’s lockdown, as measures to contain virus have been adopted since Mongolia resumed coal deliveries in late March,” said a Shanghai-based analyst. “However, compared with the peak period over September-October, the delivery volume of Mongolian coal slid recently,” he observed.
Mongolia is one of the key overseas sources of metallurgical coal for Chinese end-users. The country’s coal became more popular among markets in China after the latter tightened restrictions on seaborne coking coal imports including those from Australia, Mysteel Global notes.
Some traders have continued to lift Mongolian coal prices recently after noting firm coking coal demand from Chinese end-users. By November 16, Mysteel’s price assessment for 11% ash, 25% volatile matter and 0.7% sulphur Mongolian coal had increased Yuan 30/tonne ($4.6/t) on week to Yuan 1,080/t including the 13% VAT, hitting a seven-month high.
Written by Sean Xie, SxCoal
Edited by Russ McCulloch, SxCoal
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