Asia remained the top destination for US thermal coal for a ninth straight month in July.

Steam coal shipments destined for Asia grew to 1.86mn short tons (1.69mn metric tonnes) from 1.39mn st in July 2017, according to figures released today from the US Census Bureau. That accounted for nearly 39pc of total US thermal coal exports, which rose to 4.77mn st from 2.96mn st a year earlier.

Year to date, thermal coal exports to the Asia reached a record 14.7mn st, compared with 8.57mn st in the first seven months of 2017, as favorable pricing for US high sulfur coal continued to hold Indian buyers’ interest. Buyers are heard to still be seeking US purchases – particularly from Northern Appalachia – but the price spread with other countries’ coals has narrowed, which could threaten US exports later on.

Offers for Northern Appalachia 6,900 kcal/kg coal to India have held in the $110-$115/t cfr range throughout the summer. At the same time, prices for 5,500 kcal/kg coal from South Africa and Australia have fallen by $11-$14/t to $77.14/t and $65.12/t, respectively.

Northern Appalachia coal, however, still competes favorably with petroleum coke, which was assessed at $114/t cfr India last week for product with 6.5pc sulfur and 40 HGI.

US thermal coal exports to India rose to 739,975st in July from 514,180st. Most of that – 502,236st – was shipped out of Baltimore, Maryland, the primary exit point for Northern Appalachia coal. The rest went from New Orleans, Louisiana.

At the same time, petroleum coke exports to India dropped to 286,325t from 448,637t in July 2017.

Steam coal exports to every other major Asian destination except South Korea also increased in July when compared with a year earlier.

Thermal coal exports to Europe also climbed last month to 1.38mn st from 1.08mn st a year earlier. That was the fifth straight month of year-on-year gains to the continent.

Exports to the EU may continue to rise in coming months. After general weakness in the first half of the year, coal demand in the union is showing signs of resurrection thanks to an unseasonably hot summer and low renewable output. And concerns about French nuclear availability and tight natural gas market fundamentals have market participants generally expecting better profit margins for coal-fired power plant units this winter than in previous years.

The amount of US steam coal headed to Europe in July was the most since October 2017. That, along with a 12pc increase in coking coal volumes to the continent to 1.91mn st, helped Europe regain its spot as the top destination for total US coal exports, after trailing Asia since November.

Coking coal exports to Asia increased to just under 1.4mn st from 1.08mn st in July 2017. Gains there were dominated by increases in shipments to South Korea, India and Turkey. Volumes to China dropped to 121,254st – the least since November – from 148,442st a year earlier.

Total US coal exports rose to 9.53mn st in July from 7.18mn st a year earlier, keeping 2018 shipments on track to reach a five-year high. Only shipments to South America fell, to 730,936st from 744,927st.

Volumes to Africa nearly doubled to 732,393st from 371,222st in July 2017 and exports within North America grew to 1.52mn st from 811,356st a year earlier.

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