Coal exports from the United States have exploded since last year, due to the uptick in import demands from Asian countries – particularly India.
According to data released from US customs, the country’s coal exports have recorded a remarkable growth of 32% in the first six months of 2018 — US coal exports totaled 53.22 million metric tons (MnT) during Jan’18-Jun’18, compared with 40.43 MnT in Jan’17-Jun’17.
Source: CoalMint Research | Quantity in MnT
The United States, however, has seen production and exports for its beleaguered coal sector steadily dwindle in recent years.
After reaching a record high of 115 MnT in 2012, US coal exports declined each year from 2012 through 2016 and then increased in 2017.
In 2017, the US exported about 89.04 MnT of coal, a whopping 61% increase from the 2016 level of 55.57 MnT.
Source: CoalMint Research | Quantity in MnT
Nevertheless, it’s not a radical change seeing the huge resurgence in U.S. exports of coal to countries all over the world, especially Asian destinations such as India, Japan, China and South Korea.
In 2017, disruptions to coal supply from Australia and Indonesia—traditionally the main source of coal for many countries in Asia—compelled many Asian countries to turn to imports from the United States to offset these disruptions.
Per the U.S. Energy Information Administration (EIA), US coal exports to Asia more than doubled from 15.7 million short tons (MMst) in 2016 to 32.8 MMst in 2017, although Europe continues to be the largest recipient of U.S. coal exports.
Thermal coal, also known as steam coal, which is used to generate electricity, accounted for most of the increase in the 2017 US coal exports. India, Japan and South Korea were three of the top five recipients of US steam coal exports in 2017.
Source: CoalMint Research
India has consistently remained the largest foreign buyer of US coal since 2017, according to the EIA.
Notably, India has imported 9.06 MnT of US coal in first half of 2018, up 135% from 3.85 MnT taken over the same period last year.
Moreover, India – the largest importer of steam coal from the United States – imported 7.6 MMst of steam coal from the US in 2017—nearly three times as much as in 2016—mainly to fuel growing electricity capacity in the country.
Although India produces enough coal to meet most of its domestic needs, a large portion of India’s new coal-fired power plants require coal with higher quality and energy content than the coal that is typically produced in India.
Furthermore, India has imported 2.7 MnT of US metallurgical (or coking) coal in the first six months of 2018, up 98% from the 1.4 MnT taken Jan-Jun’17.
The uptick in US exports to India dates back to last year, when Indian buyers were reluctant to make purchases after coking coal prices skyrocketed following Cyclone Debbie.
However, the strong demand for US coal from India could weaken in coming months because there is continued uncertainty over the extent to which climatic hazards and rail disputes will dampen Australian coking coal exports.
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