ao link
Filter content by area of interest
Handling Equipment/Systems
Ports & Terminals
Transport & Distribution
Materials & Commodities
Storage
Processing
ICT & Telecoms
Civil Engineering
Mining
Environment
Safety & Security
Business
 View all Topics View all Topics A-Z
More View all Topics View all Topics A-Z

You are viewing this article with our compliments. 


register  or  login  to manage your newsletter preferences and to prevent this message from appearing.

China’s US coal imports jump 748% in Q4 2020

China emerged as one of the top importers of US coal in Q4 2020 as it banned Australian coal from entering its territories amid diplomatic tensions.

Linked InTwitterFacebookeCard
China’s US coal imports jump 748% in Q4 2020

According to data compiled by S&P Global Market Intelligence, US coal exports in the three-month period totalled 17.4 Mt, down 7.3% year-on-year but 25.1% higher quarter over quarter.

 

China had the highest gain in coal imports from the US among the top destinations in the fourth quarter of 2020. The Asian powerhouse imported 1.0 Mt of coal from the U.S. during the period, a 251.8% increase year over year and a 748.2% jump quarter over quarter.

 

With the unofficial ban on Australian coal in place, Chinese buyers turned to other major producers to maintain operations.

 

“As Chinese domestic coking coal reserves are depleted, they are experiencing a reduction in quality so need to supplement this coking coal with imported coal to maintain the correct coal quality for steelmaking,” said Oliver Woolard, market intelligence mining analyst at S&P Global Market Intelligence.

 

“Although shipments from Australia dropped, Chinese buyers are shifting the balance to other producers of high quality coking coal with the US, Canada and Russia benefitting.”

 

Other countries in the region offer coking coal of good quality, but only the US has comparable coking coal quality to Australia, Woolard added.

 

“It is simpler for Chinese buyers to import US coking coal than adapt their processes to accommodate different coking coal quality, hence increasing imports,” he explained.

 

The ban weighed on seaborne coking coal demand in 2020, according to industry observers including Réal Foley, senior vice president of marketing and logistics with Canadian diversified miner Teck Resources Ltd.

 

Foley noted that it is unclear when the restriction will be lifted. “In the meantime, what we are seeing and taking advantage of is the price premium for sales into China,” Foley said during a February 18 earnings call.

 

Randall Atkins, founder, executive chairman and CEO of Ramaco Resources Inc, recently said the ban created an arbitrage opportunity, which would “create more pricing positive dynamics” when lifted.

“China has embargoed any new Australian coals coming in,” he said. “And as a result, you’ve got an [arbitrage] that’s gone from US$60 to US$100, I guess, it’s about US$80 today,” Atkins said during a February 19 earnings call.

 

“When that lifts, we believe that there will be not only, of course, a rise in the Australian benchmark, but that will find its way also into a rise on the Atlantic benchmark.”

 

Dominican Republic was next to China with the highest growth in US coal imports, comprising 502,000t in the fourth quarter of 2020 for a 115.6% year-over-year increase.

 

India, the most popular destination for US coal, recorded deliveries of 3.6 Mt during the three-month period, increasing 55.0% year over year and nearly 70% quarter over quarter.

 

Executives with Pennsylvania-based producer Consol Energy Inc. recently noted that improving petroleum coke prices were a driver in the increase in coal shipments to the South Asian country.

 

“On the export front, we have seen several very encouraging trends as the seaborne thermal coal markets have steadily improved since the end of the third quarter of 2020,” president, CEO and director James Brock said during a February 9 earnings call.

 

Higher prices have allowed Consol to penetrate other markets in India and elsewhere, according to Robert Braithwaite, the company’s vice president of marketing and sales. “With pet coke prices at four-year highs, we’re now sending some coal into the cement market as well,” Braithwaite said during the call.

 

US coal shipments decreased year over year for 12 of the top 20 destinations in the final quarter of 2020, with the largest declines recorded by Egypt, Italy, Morocco, South Korea and Germany.

 

 

 

Linked InTwitterFacebookeCard

You may also like these related articles...

BAMIN wins bid to operate FIOL railway in Brazil

Bedeschi begins new cement project in Poland

Large rice vessel operation in Ipswich port

Bulk transhipper breaks size record in UAE

Tilbury Grain Terminal silo rebuild begins

British Steel investing £100M to improve performance

Linked In
Twitter