South African coal exports have suffered a poor April with seaborne volumes dropping from the previous month amid slack demand.
Data provided by South African customs indicate that the country had exported 6.61 MnT coal during Apr’19, down 10% M-o-M from 7.35 MnT in Mar’19. Export volumes were also 4% lower on the year from 6.86 MnT in Apr’18.
Traditionally, April is not a strong month for coal demand as it falls between the winter and summer power demand peaks –accordingly seaborne volumes are expected to be low.
However, South Africa had witnessed a strong coal offtake to its major coal customer-India. Apparently, coal receivers from the previous month- Spain, Morocco, Sri Lanka and Bangladesh, all had posted nil imports during Apr’19.
A destination-wise break-up of coal exports shows that Indian coal import from South Africa had remain almost stable m-o-m at 4.7 MnT in Apr’19, which was 38% higher on the year from 3.41 MnT in Apr’18.
Pakistan’s coal import continued its declining streak, falling 26% M-o-M to 0.69 MnT in Apr’19.
South Korea was the third-largest coal receiver in Apr’19, with imports of 0.29 MnT. Coal intake by the country grew 93% M-o-M from 0.15 MnT in Mar’19.
Mozambique with imports of 0.28 MnT coal, UAE (0.11 MnT) and Vietnam (0.11 MnT) were among some of the other noticeable coal importers in Apr’19.
Induction of Carbon Tax:
In a recent development, South Africa had passed on a law on Carbon tax to reduce emission from coal combustion which shall be levied from today i.e. on 1 Jun’19.
The introduction of the carbon tax is not likely to have any immediate impact on the price of electricity for the first phase, as it will result in a relatively modest tax rate being largely offset by the allowances.
However, it will encourage domestic coal end-user to promote cleaner technologies for coal burning.
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