South African coal exports have fallen 3% on the year to 81.45 MnT in CY18 compared with 83.6 MnT in CY17.
Exports in Dec’18 alone came to 7.88 MnT, a drop of 2% on the month and 1% on the year.
The decline in exports could be attributed to a variety of factors staring from higher sales price, subdued demand from its major customer-India, minimal investment in new mines, to weather related issues that had affected operations at the RBCT. But, in reality the rough weather was the least concern bothering the coal business in the country.
Richard Bay coal terminal, accounting for 90% of the total coal shipped out of the country, had claimed a fall in yearly exports in its annual report.
The terminal had reported loss of 36 days of loading in CY18 because of rough weather; down slightly from 38 days in CY17. However, even if the terminal was fully operational for all 365 days of the year, it is unlikely that much more coal would have been exported.
Rise in coal sales price lowering demand from India: Export sales prices remained strong for most of the year with API4 averaging USD 98/MT. Besides, the uncertainty regarding China’s stance towards coal imports after issuing a total ban on imported coal, had led to both Indonesian and Australian coals being diverted to India and forcing the discounts on lower qualities to widen.
In turn, demand from India for lower quality South African coal decreased given the cheaper alternatives from Australia and Indonesia.
While high prices were undoubtedly a contributing factor to the lower exports, it’s also likely that infrastructure constraints and an inability of many of South Africa’s coal miners to boost production were perhaps of greater importance.
Still, South Africa’s coal miners would take a positive view of likely demand before committing capital to new projects.
Major Coal Importers:
Indian coal import from South Africa remained almost flat on the year, marked at 36.38 MnT in CY18 against 36.49 MnT in CY17.
Pakistan’s remained the second-largest coal importer, registering a remarkable growth of 16% to 9.98 MnT in CY18. However, the country has concerns over the foreign exchange cost which would be a telling factor affecting the imports.
South Korea, the third-largest coal importer from South Africa, has recorded 18% fall in coal receipt as it plans to lower coal burning.
Providing a sigh of relief, Netherlands had posted an 88% rise in coal imports during CY18, which was the highest total in the past 4 years.
Mozambique, Taiwan, Turkey and Spain were among the other major coal importers from South Africa in CY18.
Leave a Reply