US coal exports fell in March from year-earlier levels on low demand from Europe, the Americas and Africa.
Shipments from US ports dropped to 6.91m short tons (6.27mn metric tonnes) from 9.22mn st in March 2019, according to US Census Bureau data released today. That brought first quarter exports down to just under 20mn st, the least since the final three months of 2016, from 25.2mn st a year earlier.
Exports resumed declines after recording the first year-on-year gain in 13 months in February.
The declines were spread somewhat evenly between thermal and metallurgical coal. Steam coal shipments dropped to 2.63mn st from 3.73mn st a year earlier while coking coal fell to 4.28mn st from 5.49mn st.
The spread of Covid-19 had minimal effect on generation in key importing countries outside of China in the first quarter, but unseasonable weather and other factors curbed coal demand. And government-imposed lockdowns on non-essential business in India, parts of Europe and the Americas starting in the second half of March have put additional pressure on US exports since then.
In March, Asia was the only continent to which US exports increased from a year earlier. That was primarily because thermal coal shipments to India and South Korea jumped to 1.15mn st and 625,641st, respectively, from 854,092st and 280,068st in March 2019.
Total thermal coal shipments to Asia climbed to 1.99mn st from 1.4mn st a year earlier.
Coking coal exports to Asia were universally lower in March than they had been the previous year, falling by one-third to 1.41mn st.
US coal exports to Europe dropped by 1.04mn st, to 1.95mn st. Thermal coal shipments to the continent fell to a record 44,607st from 719,694st a year earlier as former strongholds for US coal such as Germany and the UK took almost no US coal in March. Steam coal exports to the Netherlands also dropped, to just 44,250st from 228,214st a year earlier.
Coal-fired generation in Germany, France, Spain and the UK fell by 45pc in the first quarter when compared with a year earlier, to 6.8GW. The decrease was the equivalent of around 4.5mn t in consumption of NAR 5,800 kcal/kg coal burn in 40pc-efficient plants.
Even if demand had not decreased, prices for deliveries into Europe were too low to be attractive for most US producers to make spot sales. Prompt two-month deliveries of 6,000 kcal/kg coal averaged just under $50/t cif Amsterdam-Rotterdam-Antwerp from January through late February, when March would have been in the contract’s assessment window. US coal would have landed in northern Europe at $2.50/t-$19/t above the ARA index depending on sulfur content as producers looked Asia and the Middle East to place coal, or otherwise stayed out of the market.
Metallurgical coal shipments to Europe also declined, to 1.9mn st from 2.27mn st in March 2019.
The only region where US coking coal exports rose was in Central and South America, where they increase to 970,421st from 676,940st.
Thermal coal exports to Central and South America fell by 33pc to 312,665st. Shipments to Canada and Mexico dropped to 170,506st from 403,896st.
Steam coal exports to Africa also dropped by 84pc from a year earlier, to 117,004st as demand from Egypt and Morocco plunged.
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- On May 7, 2020