South African coal exports have increased 24% on the month in Dec’18, to cross the 8 MnT mark for the first time in CY18.
As per the data provided by South African customs, the country’s coal export was recorded at 8.08 MnT in Nov’18 against 6.51 MnT in Oct’18. Exports in Nov’18 had also ended the decline on the y-o-y basis witnessed in each of the past three months, as they were up 7% from 7.58 MnT in Nov’17.
The remarkable growth in monthly exports was boosted by higher coal intake from India, Pakistan and Taiwan during the month.
Indian coal import from South Africa rebounded after falling to its lowest monthly total in Oct’18, was marked 58% higher m-o-m at 3.16 MnT in Nov’18.
Pakistan’s coal import continued its rise on the month, noted at 0.78 MnT in Nov’18 up 30% M-o-M from 0.6 MnT in Oct’18, which was also 39% higher on the year from 0.56 MnT in Nov’17.
Taiwan was the third-largest coal receiver from South Africa, with imports of 0.59 MnT coal in Nov’18. The country has recorded its highest import since May’17, rising more than 7-folds on the month from 0.08 MnT in Oct’18.
Despite the significant growth in Nov’18, South Africa’s export in the first 11 months of CY18 was still 3% short than the corresponding total of CY17. Exports during Jan’18-Nov’18 period was 73.56 MnT as compared to 75.61 MnT recorded in the same period of the previous year.
Exxaro’s Pre-Close Message for Financial year ended CY18:
South Africa’s largest coal producer, Exxaro, has recently released a pre-close message for the financial year ended 31 Dec’18,also providing the expected production and sales figures for its coal businesses.
In its report, the coal miner highlighted that producers in the country continued to export higher quality coal to benefit from the higher sales prices. While demand in the domestic market remained strong amid supply shortages and firm local coal prices.
On the production front, Exxaro announced its coal business as resilient, forecasting a year-on-year increase of 3% during CY18. However, export sales volumes were expected to be marginally lower than FY17 due to less availability of export product from Mafube and ECC which were countered by higher product from Leeuwpan.
The company’s export volumes for the year are also expected to be 5% lower than the previous guidance (published earlier on 30 Jun’18) as a result of (i) sluggish Indian sales during August and September following the Chinese import ban on Australian and Indonesian coal which were then diverted and competed with South African (SA) coal in this market and (ii) adverse weather conditions affecting the operations at Richards Bay Coal Terminal (RBCT) during October and first half of November causing severe disruptions to the loading of vessels.
Outlook for H1 CY19
For 1H19, Exxaro has predicted a stable domestic market supported by high prices due to the tightness in supply of premium quality coal.
On the international front, higher Calorific Value (CV) markets are expected to remain fairly strong with softer pricing from current spot levels. Demand from lower CV markets is expected to remain healthy with pricing once again being strongly influenced by Chinese policy decisions, Indian import coal demand and Indonesian output, as witnessed during the second half period of CY18.
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