Australia’s thermal coal exports recorded a rise of 14.2% m-o-m to 16.5 milion tonnes (mn t) in Jun’21 against 14.3 mn t in May’21, CoalMint’s vessel line-up data revealed.
The country’s thermal coal exports to its three key NE (Northeast countries) destinations of South Korea, Taiwan and Japan rose by 61%, 58% and 34% respectively, whereas to India and Vietnam the same fell by 59% and 12% respectively on m-o-m basis.
Countries update
South Korea: The more-than-expected warmer days in the country, subsequent increase in power demand and unplanned power outages at the 1.4-GW Shin Kori 4 reactor, which tripped on 29 May, resulted in rising requirement for fossil fuel power generation in June and increased imported coal demand.
Japan: June being the last month of the Australian financial year, is usually the preferred month for coal shipments. This often spills over into July as shippers who miss the end-of-the-year deadline continue with contracted shipments.
In addition to this, Japan’s power generation from coal saw an increase by 13% from 40 TWh (Terawatt hour) in May to 45-46 TWh in June whereas the country’s overall power generation rose by 6% to 67 TWh in June, ensuring increased thermal coal demand in the country.
Taiwan is facing increased power demand amid the ongoing summer season due to which its key utility, Taipower, has postponed plans to decommission four of its coal-fired plants. The country is procuring high-CV coal especially from Australia as other-origin coal like Indonesia is being traded at very high levels and is filling the Chinese coal requirements.
Indian buyers, especially from the cement sector, are shying away from booking Australian coal amid its escalated prices and also because they have bought enough stock the before monsoon. Only a few of the coastal-based power plants that are designed to use imported coal are preferring to buy Australian coal since June.
Vietnam, which has become a key importer of Australian thermal coal since the latter’s prices corrected last year, avoided booking Australia coal in June as the prices of the same have escalated by 29% FoB basis in the last one month, impacting its imports during the month.
Outlook
Imports from Japan, South Korea, and Taiwan would remain escalated in July given the peak summer heat. Australian coal is a cheaper option against its peers. Moreover, the disruption in nuclear power supply, especially in South Korea and Taiwan will fuel demand. However, Australian coal imports into India and Vietnam are expected to remain subdued amid their escalating prices.
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