GLOBAL

China resumes coal imports from Australia

Top importer China is resuming coal imports from Australia after a three-year halt, a step that could alter trade routes and volumes for the fuel used in power generation and steel production. Trade flows have changed since 2020, when China imposed an unofficial ban on imports from Australia, the world’s second-largest coal exporter, following a diplomatic setback.

Australia was China’s second-largest supplier of overseas coal before the ban, accounting for a third of China’s imports. Coal shipments from Australia to China, which accounted for about a quarter of Australia’s total exports of fuel in 2019, fell to nearly zero in 2021 and 2022.

Since then, Japan has consolidated its position as Australia’s biggest client, while India and

Europe have increased purchases, data from consultancy Kpler showed. Australia’s supply to Japan increased to 36.5% of all its coal exports in 2022, compared with 27.6% in 2019. India’s share increased to 15.7% in 2022 from 12.3%, while Europe’s share increased to 8% from 4.6%, the Kpler data showed.

Australian state says coal miners must keep up to 10% for local needs

Australia's most populous state is set to require coal miners to reserve up to 10% of production for the domestic market, as part of a national move to cap soaring energy prices, government officials said. Australia's Labor government led by Prime Minister Anthony Albanese in December passed legislation to cap natural gas prices for one year, and secured agreements from the coal-producing states of New South Wales (NSW) and Queensland to cap the price of coal sold to power plants.

NSW Treasurer Matt Kean said the state would require those coal miners that do not currently sell into the domestic market to reserve between 7% and 10% of their output for domestic use. The new arrangement would ensure a fairer sharing of the burden among coal companies as part of the federal government’s push to drive down energy prices, he said.

The NSW Minerals Council, which represents miners, said the policy would have little impact on electricity prices but could upset trade partners, raise costs by disrupting existing supply chains and deter future resources investments in the state. He added that coal producers would continue talks with state officials to minimize the economic damage of this flawed policy. Whitehaven said it was in talks with state government officials to supply coal.

Australia's Coronado Global sees coal prices rising on resuming China imports

Australia's Coronado Global Resources said resuming metallurgical coal imports to China would likely push sea-borne coal prices higher in the short term, with strong realized prices in 2022 boosting its annual revenue. The comments come after China, Australia's largest coal importer and trade partner, earlier this month lifted an unofficial ban on coal imports and others commodities from the country after a nearly three-year-long geopolitical tussle.

The Brisbane, the Queensland-based miner, which has not typically sold coking coal to China, said last week it had received enquiries for long-term supply as Beijing lifted its unofficial ban on coal imports from Australia. Chief Executive Officer Gerry Spindler said he expects met coal prices to remain above historical averages throughout 2023 due to the ongoing trade constraints for Russian coal and elevated thermal coal demand and prices.

The coal miner posted annual revenue of $3.57 billion, 66% higher than last year with average realized prices more than doubling to $303.1 per tonne. However, its coal sales volume for the year fell 7.7%, sending shares of Coronado Global 3.3% lower to A$2.07 at 0336 GMT.

Dalrymple Bay Infrastructure bullish on coal exports

Dalrymple Bay Infrastructure, the Queensland coal export port, has told investors that its cash flows will benefit from rising inflation as it expressed confidence in future demand for metallurgical coal. The listed company’s shares have rallied over the past few months amid expectations that Australian exports of metallurgical coal, which is used to make steel, will be in demand from China as tensions with Australia ease.

Dalrymple Bay coal terminal in Queensland expects demand for metallurgical coal will remain strong. European countries that no longer get their coal from Russia because of its war on Ukraine are also expected to be buyers, particularly if Europe avoids a serious recession. DBI’s shares, which were listed in late 2020 at $2.57 per share but have always traded well below their offer price, are now trading within a whisker of their listing price, closing on this week at $2.51 per share.

Metallurgical coal exports from Australia are expected to rise over the next few years, with the federal government forecasting Australia will export 174 million tonnes in fiscal 2023 – up from 163 million tonnes in 2022 – and then to further climb to 183 million tonnes in 2024.

South Africa Not Ditching Coal

'Just Like That', Ramaphosa Cautions

Coal-rich but energy-starved South Africa will not immediately abandon its fossil-fuelled electricity generating plants as it transitions to cleaner forms of power, President Cyril Ramaphosa said. South Africa, one of the world's largest polluters which generate about 80 percent of its electricity through coal, is in the grip of an energy crisis. It has been blamed on aeging power stations, sabotage, and theft of coal and spare parts by organized gangs.

Since 2021, the country has secured several billions of dollars in international loans and grants to support a green transition. But Ramaphosa cautioned against the perception that we are called upon to make a trade-off between energy security and a just transition to a low-carbon economy.

Addressing his African National Congress (ANC) party's senior officials, he said it was not the case "that we must make a choice between coal and renewable energy. Two recently built plants, ranked among some of the biggest coal-powered stations in the world, are beset by design problems. But they will remain operational until the end of their 40-year lifespan, he vowed.

SA coal consumption fell last year and is unlikely to recover in 2023, says IEA

South Africa’s coal use dropped last year making it one of a handful of countries that used less of the fuel, according to BusinessLive.Citing the International Energy Agency IEA), BusinessLive said consumption fell 5% to 157 million tons (Mt) owing to increased power rationing imposed by the state-owned energy utility, Eskom.

The IEA said in a forecast that coal consumption would stabilize in South Africa but it would not recover to former levels. In addition to loadshedding, the IEA also said slow economic growth would have a bearing on coal consumption. Globally coal demand increased to a record in 2022, said the IEA. “The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, IEA director of energy markets and security.

Global coal consumption increased by 1.2% in 2022, surpassing 8 billion tons in a single year for the first time, but it was forecast to remain flat at that level through 2025 as coal consumption declines in mature markets such as Europe while remaining robust in emerging Asian economies, said BusinessLive.

Transnet attempts to alleviate truck congestion at Richards Bay port

An embargo on trucks offloading at the port of Richards Bay during the festive season caused high traffic volumes and backlogs of vehicles waiting to be serviced. Transnet said in response to questions the “backlog was due to Transnet and the City of Umhlathuze deciding to minimize the trucking operation during the festive season to accommodate the high volume of tourists, visitors and holiday activities held during the festive period.

Transnet has also beefed up offloading capacity by deploying additional resources to avoid any further congestion. At the staging areas, personnel is also in constant communication with each truck’s supervisor via two-way radio, for the guidance of accurate destination. There is also constant negotiation with customers to deploy marshals that will assist in directing the traffic.

In the cases where a truck arrives in Richards Bay without a permit, they are reported to the road traffic department and a fine is issued. A task team comprising Transnet, municipal officials, traffic department, cargo owners, and trucking companies have been formed to deal with the situation.

Indonesia Coal Finds Its Way to the EU and Indian Markets

Indonesia’s coal exports surged during 2022, with the EU and India receiving the lion’s share of these increases. In its latest weekly report, shipbroker Banchero Costa said that “after a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels. In the full 12 months of 2022, total global seaborne coal loadings increased by +5.9% y-o-y to 1204.9 mln t (excluding cabotage), from 1138.3 mln t in the full 12 months of 2021, although still be- low the 1275.6 mln t in Jan-Dec 2019.

As already mentioned, the worst was at start of the year, and the trend in recent months has been increasingly positive. In 1Q 2022, global loadings were down -4.8% y-o-y to just 257.4 mln t, and down -20.3% from 1Q 2019. In 2Q 2022, coal loadings were a strong +8.5% y-o-y at 313.8 mln t, and down -4.1% from 2Q 2019. In 3Q 2022, shipments increased again to 317.2 mln t, up +6.3% y-o-y, and just -0.7% from 3Q 2019. In 4Q 2022, loadings were 316.5 mln t, up +12.9% y-o-y from 4Q 2021, and -0.6% from 4Q 2019”.

According to the shipbroker “in Jan-Dec 2022, exports from Indonesia increased by +21.2% yo-y to 388.9 mln t, whilst from Australia down -5.0% y-o-y to 340.3 mln t. Seaborne coal imports into the European Union surged by +33.9% yo-y to 116.5 mln t in Jan-Dec 2022, whilst imports to India increased by +13.6% y-o-y to 203.8 mln t, and imports to China declined by -3.2% y-o-y to 234.7 mln t. Indonesia is the world’s largest seaborne exporter of coal, accounting for 32.3% of the global seaborne coal market in 2022.

Beware Indonesia's coal export heft in 2023: Maguire

The world's top thermal coal exporter shocked global markets a year ago by temporarily banning coal exports to protect domestic power producers, sending coal prices soaring and kicking off a historically volatile year for coal and other power fuels. But since then Indonesia has made a different mark on the global coal arena by setting a new record pace for shipments that if sustained puts it on course to be the first country to surpass half a billion tonnes of coal exports in a single year.

With global power markets still disrupted by the fallout from Russia's invasion of Ukrainewhich severed pipelined natural gas supplies to Europe - demand for all power generation fuels is on track to scale record heights in 2023. That means that despite efforts to transition global energy systems away from fossil fuels, Indonesian coal sales may hit a new milestone this year, with commensurate repercussions for emissions of carbon dioxide and other gases that are already at record concentrations in the earth's atmosphere.

Jakarta's surprise coal export ban on January 1 came at the height of last winter and forced major importers to scramble for replacement supplies from other exporters such as Columbia, South Africa and Australia. At the time, the move had been expected to permanently dent Indonesia's export potential as key customers took steps to reduce reliance on a single supplier by diversifying their coal purchase streams.

North Asia cranks coal imports to fuel industrial reboot

Thermal coal imports into China, Japan, and South Korea – three of the world’s largest coal users – hit their highest combined total in 16 months in December as the North Asian manufacturing powerhouses primed their economies for growth in 2023. Economic momentum in these countries – which collectively accounted for nearly half of all thermal coal imports in 2021 – was subdued in 2022 as China’s strict zero-COVID measures stifled industrial activity across the world’s largest manufacturing base.

Japan and South Korea have extensive supply chain ties with China which meant that each country suffered slowdowns in both productivity and demand growth in 2022 as China’s COVID-19 curbs stifled the movement of goods and people over much of the year. But thanks to a slew of stimulus and easing measures passed by Beijing that are designed to kick start a revival in China’s economy this year, factories and industries throughout North Asia are now also primed for a pickup.

To feed that anticipated sustained rise in output and consumption, each country has stepped up imports of thermal coal, which generates power for electrical grids as well as plants producing everything from cement and ceramics to refined metals, chemicals, heavy machinery, and fertilizers. Combined thermal coal imports by the three countries totaled 43 million tonnes in December 2022, the highest monthly tally since August 2021, and ship-tracking data from Kpler show.