US coal exports dropped in June amid weaker fundamentals in thermal and metallurgical markets.
Shipments fell to 7.94mn short tons (7.2mn metric tonnes) from 10.1mn st a year earlier, according to US Census Bureau data released today. That brought volumes for the first half of the year down to 50.5mn st from 58.1mn st in the same period of 2018.
June’s decrease was led by a 39pc drop in thermal coal exports, to a 25-month low of 27.6mn st. Coking coal shipments slid by a relatively more subdued 7.1pc to 5.19mn st.
Decreases for thermal coal were spread throughout the globe. Only exports to the Netherlands, Egypt, Poland and the Dominican Republic recorded any measurable gains in June, and most of those increases were the equivalent of about a cargo’s-worth of coal.
Northern Appalachian coal was the primary beneficiary of the handful of gains. Terminals in Baltimore, Maryland, handled 994,150st of steam coal in June, up from 511,116st a year earlier.
Steam coal exports from Baltimore to Asia climbed to 548,471st from 359,861st, while shipments to Europe quintupled to 255,438st. Volumes from the port that were en route to Africa increased to 120,371st from 76,933st.
Northern Appalachian coal exporters were heard to be making deals for 2019 deliveries through early June even as prices tested profitability.
Market participants report still occasionally hearing offers, but demand has dwindled amid competition with competing fuels and general perceptions of ample supply in high-sulfur markets.
Executives with eastern railroads CSX and Norfolk Southern said last month they expect coal exports in the back half of this year to lag 2018 levels.
“Export coal had been below our expectation, mostly driven by thermal and lower API 2 benchmarks, which we think will likely continue into the second half,” CSX executive vice president of sales and marketing Mark Wallace said on 16 July.
CSX shipped 21.1mn st of coal to export terminals in the first half of 2019, down from 30mn st a year earlier, and is targeting around 40mn st in exports for all of 2019. That would imply a 2.2mn st decrease in July-December shipments, to 18.9mn st.
Steam coal exports from New Orleans to Africa also increased in June, to 342,873st from 185,113st. But shipments to other continents declined. Exports to Asia and Europe plunged to zero and 442,203st, respectively, from 652,566st and 711,691st a year earlier.
Total US steam coal exports to Asia dropped to 1.26mn st from 2.1mn st in June 2018. And shipments to Europe fell to 699,095st from 1.14mn st.
North American trading partners fell to the second-smallest destination for US thermal coal, with just 132,876st being directed to neighboring countries, down from 560,786st a year earlier.
US metallurgical coal exports within North America slipped to 444,076st from 493,448st. Coking coal exports to Asia plunged to 1.3mn st from 2.22mn st.
But those decreases were partially offset by gains in volumes to Central and South America, Europe and Africa. Europe was the primary destination for US coking coal, with 2.22mn st sent to the continent in June, up from 2.15mn st a year earlier.
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- On August 2, 2019