Australia: Thermal coal exports slip by 7% in Feb '21 recording a second consecutive drop
In the first two months of 2021, Australia shipped about 36 mn t of thermal coal with 43% exported to South Korea, 12% to Japan, 10% to India and rest to others.
Australia's thermal coal exports, which had fallen by 4% m-o-m in January, recorded a drop of 7% in Feb'21. It stood at 16.4 mn t in Feb'21 against 17.6 mn t in Jan'21, CoalMint's vessel line up data revealed.
While Australia's key export destinations like South Korea and Taiwan recorded an increase of 24% and 5% respectively, exports to Japan and India plunged by 13% and 34% respectively (m-o-m basis) in February.
South Korean coal imports increased in February despite a drop in coal-fired power generation. This increase is attributed to restocking by the utilities ahead of spring and summer season. Thermal coal stock with South Korean utilities have dipped because of comparatively lower imports in past few months when thermal coal prices skyrocketed amid unreasonably cold conditions. Also, LNG import costs have jumped to a 23-month high of $10.21/mn Btu last month, supporting coal demand.
Thermal coal imports dropped in Japan due to returning nuclear capacity, milder weather conditions and increased power generation using renewables, especially solar, due to comparatively longer days, as informed by the market participants.
India increased its imports of Australian thermal coal, especially since Oct'20, as Australian thermal coal became cheaper amid informal ban by China on it. However, in February, Indian buyers refrained from booking Australian coal amid higher availability of domestic coal and its escalated prices towards the end of January.
Vietnam has also become a key importer of Australian thermal coal when the latter's prices corrected last year. The country has been importing an average of 1 mn t of Australian thermal coal per month since Jul'20. However, in February there has been a dramatic decline of 55% in Vietnamese coal imports from Australia industrial activities slowed down amid the lunar New Year Holidays and rise in COVID-19 cases in the country.
Australian thermal coal exports are likely to dwindle in March. Importers across the globe are refraining from making any significant bookings due to heightened freight rates and also because of reduced power demand in warmer days of March.