SteelMint Events

Tag: exports

  • Russia: Coking coal exports rise nearly 50% in 2022 on higher shipments to China, India

    Russia: Coking coal exports rise nearly 50% in 2022 on higher shipments to China, India

    Russia’s seaborne exports of coking coal and PCI coal are estimated to have increased by a sharp 48% y-o-y to 47 million tonnes (mnt) in 2022 from around 32 mnt in 2021, as per provisional data maintained with CoalMint. Although sanctions on Russia cut off seaborne supplies to traditional importers such as the EU, Japan and South Korea, increased exports to China and India contributed to the growth in export volumes.

    The EU has hitherto been heavily dependent on imports of Russian coal, which accounted for 46.7% of all EU imports of solid fuel last year, according to Eurostat data.

    Leading importers

    Russian PCI and coking coals saw stronger demand in China, and also into India, trading at prices lower than for alternative coals from Australia and North America.

    Data reveal that Russia’s met coal exports to China increased by nearly 100% y-o-y to over 21 mnt in the year gone by. Despite China’s crude steel production falling around 2% y-o-y in 2022 and relatively low domestic coal prices due to extensive COVID-induced lockdowns, imports from Russia surged due to high discounts offered by Russian suppliers post imposition of trade sanctions.

    Russian met coal exports to India edged up even more sharply by over 140% y-o-y to 9.3 mnt. The country’s crude steel production increased by 6% y-o-y to over 124 mnt in 2022 while coking coal imports were stable at around 70 mnt. Cheaper Russian cargoes were lapped up by Indian coal importers amid high global coal prices following the outbreak of the Russia-Ukraine war.

    On the other hand, Russia’s exports to traditional markets such as Japan and South Korea fell by 40% and 59%, respectively amid sanctions.

    Moreover, the ban on the transport of Russian coal was amended in September and allowed for the provision of services like shipping, financing and insurance needed to transfer coal and other products by ship to destinations outside the EU in order to alleviate the energy crisis worldwide. Since then Russia’s seaborne coal exports jumped sharply, with many of the shipments going to Asia.

    Outlook

    Russia’s production of met coal increased by 4.5% to 105 mnt in 2022, as per Rosstat data. However, higher export shipments may not be possible due to logistical bottlenecks. Cancellation of discounts on coal freight levied by the RZD may exert pressure on suppliers to curtail discounts. Also, China’s lifting of an unofficial ban on Australian coal imports, higher shipments by Mongolia and enhancement of domestic production are likely to affect China’s imports of Russian coal.

    However, Russian suppliers looking to ramp up exports to China know that higher discounts are likely to increase the attractiveness of Russian cargoes, even for Indian buyers. Going forward, India’s coking coal demand is likely to increase and – quality considerations apart – if Australian supplies become costlier post China’s re-entry into the Asian seaborne met coal market, Indian buyers may have to fall back on Russia.

    2nd Asia Coal Trade Summit

    Will Russian met coal exports to Asia increase in 2023? How will trade dynamics pan out with the continued sanctions on Russian exports? How is Russia gearing up to consolidate its logistical networks to channel increasing volumes to Asian buyers in the coming years? For in-depth insights on such pressing issues and more, sign in for CoalMint’s 2nd Asia Coal Trade Summit to be held in Bangkok, Thailand on 24-25 April, 2023

  • Indonesia’s coal exports rise 10% in CY22. Will the momentum sustain in CY23?

    Indonesia’s coal exports rise 10% in CY22. Will the momentum sustain in CY23?

    Indonesia’s thermal coal exports increased by 9% y-o-y to 341.3 million tonnes (mnt) in calendar year 2022 (CY22), CoalMint data shows. Exports to India rose by 57% y-o-y. However, shipments to China and Vietnam recorded a decline in 2022.

    Indonesian shipments to India stood at 109.43 mnt in 2022. India faced a sultry summer in the year gone by, compelling the government to mandate power utilities to import 10% of their coal requirements for blending with domestic coal. Of the total volume of Indonesian coal imported by India last year, about 60% was imported during March-July when summer was at its peak.

    India apart, Indonesian coal shipments to South Korea and Japan increased by 30% and 37% y-o-y to 25.84 mnt and 17.65 mnt, respectively.

    In a significant development, Indonesia turned out to be the preferred destination for thermal coal imports by some Asian countries amid altered global trade dynamics. Sanctions on Russian coal imposed by the European countries resulted in increased demand for Australian coal from Europe. This played a crucial role in keeping Australian coal prices elevated. As a result, key buyers of Australian coal such as Japan and South Korea opted for more Indonesian coal.

    High-CV Indonesian 5800 GAR coal prices averaged $170/t FOB in CY22, an increase of 53% y-o-y. In contrast, Australian 5500 NAR coal prices averaged $196/t FOB in CY22, 14% higher than Indonesian thermal coal prices.

    Indonesian coal exports to Vietnam dropped as the country used more of domestic coal and avoided importing coal due to high prices.

    Outlook

    Indonesian thermal coal exports are likely to remain under pressure in the coming months as rising COVID-19 cases in China – a possible fallout of the Lunar New Year celebrations – may impact logistics, industrial activity and power demand. In India, demand from the power, textiles and cement industries may remain subdued due to increasing domestic production. However, the government’s recent mandate to power plants to import 6% of their overall requirements as a safeguard measure for the peak summer season is most likely to drive imports in the short term.

    2nd Asia Coal Outlook & Trade Summit

    Will Indonesian coal imports grow in the short-to mid-term due to cost competitiveness amid changing global trade flows? Or will rising domestic power generation by PLN tilt the policy focus towards conserving more fuel for domestic use? Follow the discussion at CoalMint’s 2nd Asia Coal Outlook & Trade Summit to be held in Bangkok, Thailand, on 24-25 April, 2023.

  • Bangladesh banking on coal imports as energy demand soars

    Bangladesh banking on coal imports as energy demand soars

    The ever-growing demand for electricity has increased the reliance on coal globally, especially in emerging economies with underdeveloped renewable energy infrastructures and pressing energy security concerns. Bangladesh is a case in point.

    The country has increased procurement of imported coal in a significant way to make up for domestic scarcity of the fuel. Besides, commissioning of new coal-fired power plants has also pushed up demand for coal.

    As per data compiled by CoalMint, the country’s coal imports surged 44% y-o-y to 8.83 million tonnes (mnt) in CY22. Indicating strong demand, the total volume of imports in CY21 was already surpassed during the first 10 months of CY22.

    At the same time, tight supply and high prices of coal in the global market forced Bangladesh to re-work its procurement strategy.

    The sharp growth in imports was mainly driven by higher sourcing from Indonesia in CY22. On the other hand, intake from other traditional markets such as South Africa and Australia plunged 39% and 35%, respectively.

    Inadequate domestic supplies

    The Barapukuria Coal Mining Company (BCMCL), operator of the first and sole coal mine in Bangladesh, reported a decrease of 7% in annual coal production in FY21 (July 2020-June 2021). The company recorded 753,973 t of output in FY21 as against 811,137 t in FY20, thus attaining its lowest output in the past six fiscals.

    Given this subdued performance, the company suspended sales to local buyers from 19 March, 2018, in order to secure supplies for the power units of the state-run Bangladesh Power Development Board (BPDB).

    Of the total output, almost the entire volume was delivered to BPDB, while a nominal 610 t was supplied externally during FY21, as per the company’s report.

    In a fresh setback to the fuel security of power plants, the company is mulling to increase its coal pricing to compensate for the upward revision in royalty payable on coal. Moreover, the price hike was also necessitated to adhere to the proposed mining agreement that will require additional land acquisition to extract coal from the northern part of the mine.

    It is important to note that BCMCL has been selling coal at a fixed price of $130/t to BPDB since May 2015.

    Coal: A cheap option

    Due to availability of gas reserves, the gas-based plants in Bangladesh hold a majority share in total power generation capacity.

    Total installed capacity of BPDB-owned plants was 22,482 MW in FY22, of which gas-based plants’ capacity was 11,476 MW, whereas capacity of coal plants stood at a mere 1,768 MW. Plants based on diesel, furnace oil, renewables, etc. made up for the remaining share of power capacity.

    A comparative cost analysis indicates that gas is the cheapest source of power generation. However, coal was still economical than other

    alternative power sources – another reason for the country’s growing reliance on coal.

    Coal demand accelerates

    Fuelled by the commissioning of the two 660 MW units of the Payra power station, coal imports have started increasing at Payra port, which was established in order to facilitate coal imports for the power sector.

    Meanwhile, at least six other coal-fired power projects are expected to be commissioned, three of which, with a total capacity of 2,800 MW, are expected to be completed soon.

    As per a study by the International Energy Agency (IEA), coal consumption in Bangladesh declined by 0.8 mnt to 3.8 mnt in CY21 but is expected to grow by 2.8 mnt in CY22.

    The report suggests that the country’s coal power fleet would increase to around 5,000 MW by CY25, boosting annual coal demand to 19 mnt.

    2nd Asia Coal Outlook & Trade Summit

    Is Bangladesh’s energy security at a crossroads with the withdrawal of foreign investments from the country’s power sector? Does the country share this predicament with other emerging economies in Asia that are grappling with energy security concerns amid global inflation and depleting investments in coal-based assets? Want to be a part of the discussion? Check out registration details for CoalMint’s 2nd Asia Coal Outlook & Trade Summit to be held at Grand Hyatt Erawan in Bangkok, Thailand on 24-25 April, 2023.

  • Karnataka iron ore exports to resume after 10 years

    Karnataka iron ore exports to resume after 10 years

    Iron ore exports from Karnataka are about to resume after a gap of 10 years, SteelMint heard from market sources. Exports from Karnataka were banned in 2012 by the Supreme Court, which was in effect till May this year, with the aim of preventing environmental degradation and to ensure that the mineral resources of the state were preserved for the domestic industry and for future generations as part of the concept of inter-generational equity.

    The Supreme Court on 20 May this year lifted curbs on exports of iron ore from Karnataka and eased all restrictions on sales from the districts of Bellary, Chitradurga and Tumkur where mining activity had been prohibited following rampant environmental transgressions in 2011.

    As per a recent update received by SteelMint, a leading miner in the state is planning to export a capesize vessel of iron ore fines for which the material is already in the process of being transported to Krishnapatnam Port. Market chatter is revolving around the near-term prospects for iron ore and pellet exports by Karnataka-based miners.

    Factors which may drive exports

    • Lifting of export curbs: The apex court lifted curbs on iron ore exports and allowed iron ore operators in the state to sell excavated ore through direct sales as against just through e-auctions. This is a win-win for merchant miners and steel companies. By lifting the ban on exports of iron ore, the court opened an avenue for sale of surplus ore, which the industry had been pleading for. Also, the export duties on pellets and iron ore (except high-grade) have been rolled back recently. It should be noted that there is a possibility of existing low-grade iron ore stocks at mine pitheads in the state to come for exports in the short term. These are estimated at around 6 mnt, as per sources. Additionally, some volumes of seized material around 20-30 mnt are yet to be lifted, which may also come up for exports, as per sources. Besides, some small volumes of fines with sponge iron (CDRI) producers in the state might well get earmarked for exports.

    • China demand: After a long lull induced by Covid-related restrictions, the Chinese market is showing some positive sentiments due to the 16-point stimulus package announced by the government for the real estate sector, which accounts for around 35% of China’s steel demand. The possibility of a turnaround in the property sector has been driving iron ore prices higher over the past month, along with loosening of Covid restrictions. A weaker dollar, optimism about China’s economic recovery and positive developments in the real estate sector boosted market sentiment, as iron ore futures on the Dalian Commodity Exchange (DCE) have hit a 6-month high. As global iron ore fines Fe 62% prices have recovered from $80/t in the beginning of November to over $110/t currently, the incentive for exports is always present.
    • Production ramp up: The Supreme Court has raised the iron ore production ceiling in Karnataka from 35 mnt to 50 mnt from the A and B category mines. The production cap in Bellary has been raised to 35 mnt from 28 mnt, while in Chitradurga the ceiling has been raised to 15 mnt from the erstwhile 7 mnt. Therefore, the total cap has been increased to 50 mnt. The apex court had lifted the five-year-old ceiling on production from 30 mnt to 35 mnt for A and B category mines in 2018. There was no cap on the C category mines. It has been generally observed that total iron ore demand in the state stands at around 38 mnt annually. Therefore, following the possible production ramp up in the state, there is always the possibility that surplus material would be left for exports.

    Karnataka road show

    How is Karnataka’s iron ore and pellet industry shaping up post SC verdict? What is the potential in terms of production, demand, exports, and sales? Are you an industry stakeholder keen to find answers to these and several other queries? Book your seat at SteelMint’s Road Show-cum-Conference on Karnataka’s Mining Sector to be held on 19-21 January, 2023.