South African thermal coal exports to Europe rise in September amid winter restocking

South African thermal coal export shipments to Europe marked a 60% m-o-m rise to 2.9 million tonnes (mnt) in September 2022, CoalMint vessel data showed.

Thermal coal exports to European countries rose as utilities rushed to restock after the volatility in gas prices and supply from Russia raised fears of a ‘deepening energy crisis’ in the bloc. Germany has resumed several idled coal-fired power plants to survive this winter season, while households in the Netherlands are stocking up cheaper alternatives like coal, wood, and pellets for heating stoves.

South Africa is a key destination for European coal imports given its geographical proximity and high-CV coal being a perfect fit for its coal-fired power plants.

South African coal exports to Europe

*Qty in mnt

Shipments to Netherlands were the highest at 1.2 mnt last month, while exports to Germany marked the highest rise of 75%.

However, overall South African thermal coal exports fell marginally by 3% m-o-m to 5.4 mnt in September 2022, amid lower exports to Asian countries. 

South African coal exports to Asia decline

Export shipments to Asia decreased last month amid elevated global prices, depreciating currency, and the rising dominance of other origin coal in these markets.

*Qty in mnt

South African thermal coal export shipments to India fell sharply by 28% m-o-m as demand from sponge iron manufacturers declined due to its elevated prices.

The rising dominance of Russian coal and the emergence of alternate blends in Australian and Mozambique coals in the Indian sponge iron space lowered demand of South African coal, wherein bookings were only in the low-CV RB3 category.

Moreover, export shipments to South Korea and Malaysia also declined as both the countries increased their Indonesian coal purchases due to its relatively cheaper prices. However, shipments to Pakistan recorded a 55% rise as the country had meet its power sector’s requirement.

Outlook

South African thermal coal exports are likely to rise in the coming months with strong European demand amid gas supply uncertainty from Russia. Exports to Asia are limited amid elevated price sentiments.