South Africa’s coal exports remain largely stable, exports to Europe surge in 2022

South Africa’s total thermal coal exports remained largely stable in Calender Year 2022 (CY22) at 62.13 mnt as against 61.56 mnt in CY21. Interestingly, thermal coal exports remained stable despite supply disruptions in the nation.

It may be recalled here that South Africa continued to face supply disruptions due to floods, cable thefts, derailments that hampered the exports from the country during the year. In fact, the nation’s rail operator, Transnet, had declared force majeure towards the end of the year, in the North Corridor route that runs from the mines to the Richards Bay Coal Terminal (RBCT) due to derailment of 97 wagons. The situation worsened further due to extortion and violent acts.

Moreover, changed trade dynamics due to Russia-Ukraine war this year resulted in an increase of South African thermal coal export shipments to major European countries to 14.70 mnt in 2022 as against 2.26 mnt in 2021, CoalMint’s vessel data showed.

South African coal exports to key European countries

Within Europe, shipments to the Netherlands were the highest at 6.94 mnt last month, followed by Italy, at 2.43 mnt.

South African coal exports to Asian markets see mixed trend

South Africa recorded the highest exports to India at 19.53 mnt in CY22, down by 22% against 25.03 mnt in CY21. The exports dropped amid higher domestic production and sponge iron sector using blends of Australian, Russian and even domestic coal as raw material instead of just depending upon the South African coal.

Exports to Pakistan also recorded a drop as its elevated prices made buyers to opt for domestic coal or for the fuel available from neighbouring countries.

However, in the case of South Korea, Japan and Taiwan, South African coal shipments recorded a significant rise as can be seen in the table. This was mainly because the usual Australian coal which is consumed by Japan and Korea was being diverted to European countries, making the utilities there to opt for alternatives.

Outlook

South African thermal coal exports may rise in coming months as supply constraints have reduced, and demand from JKT (Japan, Korea and Taiwan) may continue to support its exports. However, demand from India may remain sluggish due to an increased availability of domestic coal and even other alternate blends.