TRADE & COMMODITIES
Mixed signs for coal imports into Asia
Transshipment plays an important role in Asia’s coal market (photo: Shi.E.L.D. Services).
APRIL 2022
www.drycargomag.com
Richard Scott, Bulk Shipping Analysis
DCi 6
Imports into countries in Asia comprise the biggest part of world seaborne coal trade, over four-fifths of the total. Consequently the Asian trend is closely watched and, as expected, a partial recovery was seen last year, after the previous year’s large reduction when the coronavirus pandemic severely weakened energy consumption. Amid reviving energy use in 2021 coal demand strengthened, but prospects for further growth during 2022 seem unclear. Asia’s role as an importer is often the main focus of attention, although the regional contribution as an export supplier is also a prominent feature of the global coal market. Import demand reflects economic and commercial influences, but political pressures in many countries have become increasingly visible. Typically these are less predictable, in both timing and magnitude, resulting in forecasts with a greater speculative element. Nevertheless, underlying determinants
of coal movements into Asia are broadly clear. Among energy sources, coal consumption — frequently dependent wholly or partly on imports — remains a preferred option, assisting economic progress and enabling rising energy use. This emphasis supports purchases of coal, especially when competitiveness is improved by high prices for alternatives such as natural gas. Conversely in several larger economies, reducing coal consumption is a government environmental policy aim. Such policies impose a shift towards cleaner energy supplies, restraining coal imports. Over three-quarters of Asia’s import volume consists of steam coal, with the remainder comprising coking coal. The largest individual importing countries are China, India and Japan, while South Korea and Taiwan are also major buyers. In recent years a group of smaller importers has become more prominent, including
Vietnam’s notable robust trend.
SUPPORTING ENERGY USE Energy consumption in Asia revived last year after the downturn caused by the pandemic’s adverse impact on economic activity. Changes in the trend were reflected in coal usage, which fell and then recovered. Previously there had been solid support for energy and coal demand, accompanying increased volumes needed by power stations, steel mills and other industries amid economic progress in many countries. Some positive signs for the remainder of 2022 and beyond are still evident. The damaging effects of the pandemic are receding in many economies although, as events in China have emphasized in recent weeks, there remains potential for further setbacks. But prospects for the world and individual countries in Asia have been overshadowed since the end of February
