Higher costs for coal are expected due to Mongolia's move to increase export prices - Global Times

• Published date: 12 January 2023
• Publication title: Central Asian News Services

Mongolia's reported move to modify how its coal exports to China are priced may mean higher costs for Chinese users, and Chinese industry experts said that efforts by Mongolia to change the ecosystem of cross-border coal trade may affect the outlook for Mongolian energy export to China, Global Times reported.

Chinese coal traders at the China-Mongolia border said they had heard about the intention of the Mongolian side to sell coal at ex-border prices instead of mine-mouth prices starting from February 1, citing an executive of Erdenes Tavan Tolgoi (ETT) JSC. Tavan Tolgoi is a massive coal mine in Mongolia

The move may reflect ETT's goal of increasing revenue by changing the pricing, representative of Mengtong International Logistics Agency in North China's Inner Mongolia Autonomous Region Li Xiang told the Global Times on Monday.

Chinese coal buyers sending trucks to fetch coal from ETT will be affected, but "Mongolia will still be shipping coal to China even if the price rises to some extent", Li said.

China has ramped up imports of coal from Russia and Mongolia in recent years. China imported 26.1 million tons of coal from Mongolia in 11 months of 2022, accounting for 10% of total coal imports, data from steel industry portal Lange showed.

Some 21.6 million tons were coking coal shipments bound for Chinese steel mills, and the volume accounted for 37.6% of China's coking coal imports, which stood at 57.4 million tons during the period, Lange data showed.

Experts said the prospective pricing change will slightly dent the appeal of Mongolian coal but will not affect China's overall coal supply.

"The move, which will result in a price rise, will likely curb Chinese demand for Mongolian coal, but looking at the supply and demand...