Colombia’s coal exports during Jan-Jun’20 have recorded an increase of 14% y-o-y at 44.6 mn t against 39 mn t last year.
What led to the rise in H1 CY20?
—Despite the ongoing pandemic that led to lockdowns in various countries adversely impacting coal demand, Colombian coal exports recorded an increase.
—This can be attributed to diversified export destinations and dramatic fall in coal prices.
The usual key export destinations for Colombia are Turkey, Chile, and Mexico. However, in H1 2020, the country diversified its exports to countries like India that had zero exports till last year and to South Korea where exports increased by 34% y-o-y basis.
—In case of India, the Colombian coal was majorly used by cement manufacturers and power plants for blending purpose.
—Apart from this, the average export price of high CV Colombian coal in H1 CY20 stood at $57.9/t against $82.6/t during same period last year which made it an attractive option given its good quality.
Colombian coal exports to fall in H2 CY20
Colombia exported 5.73 mn t of coal in July, down 15% from June and 6.6% lower than Jul’19.
—Cerrejon, which is Colombia’s biggest miner has recently mentioned about its inability to achieve 20 mn t coal production target for 2020 due to ongoing strike by labour union, Sintacarbon.
—Amid failed negotiations between the two, the strike that started on 31 Aug’2020 is resulting in production loss of 56,000 tonne per day and amounting to an export quantity loss of 1.23 mn t so far.
—There no clarity on when the strike would end and how much production loss would company suffer in total. However, Colombia’s coal exports are destined to fall in H2 CY20 in line with curtailed production.
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