Australian thermal coal exports rise 17% in May on increasing demand in Asia, Europe

Australian thermal coal export shipments rose sharply by 17% m-o-m to 15.9 mnt in May, CoalMint vessel line-up data showed.

Shipments to major Asian and European countries were higher as Russian sanctions and logistic constraints in South Africa prompted these countries to look for alternative supplies like Australian coal.

However, a major rise in exports was also capped amid the heavy rainfall in Queensland and New South Wales that disrupted shipments from the country.

Trade dynamics

*Qty in mnt

Shipments to Asia soar

With the rising temperature in Asia, Australian coal shipments to major countries in the continent recorded a significant rise last month.

Exports to Japan were the highest at 7.2 mnt amid its rising power demand as coal-fired power generation gained momentum amid elevated LNG prices. Japanese traders tend to prefer Australian supplies over other origins owing to higher grades, which results in lower carbon emissions.

Shipments to India rose by a whopping 178% amid an ongoing domestic coal crunch prompting several coal-consuming units including power plants to import Australian supplies.

Shipments to South Korea, Taiwan, and Vietnam also gained strength surrounding increasing summer heat in countries.

Exports to the Netherlands rose sharply for the third straight month in May by 54%. The country has raised its procurement of other origin coal including Australia in an effort to replace Russian energy imports. Notably, Russia exported a monthly average of 1 mnt of thermal coal to the Netherlands in 2021.

Short-term outlook

Demand for Australian coal is likely to remain strong in Europe and Asia as sanctions on Russian exports remain in place. Meanwhile, with the approaching dry season in Australia, exports are likely to remain supported in the upcoming months.