US
coal exports may surge 60% in 2018 – analyst, by Laurence Walker, 7/18/18,
Montel, London
(Montel)
US seaborne thermal coal exports could surge 60% this year amid a shortfall in
global supply and healthy import demand, the director of consultancy Perret
Associates told Montel on Wednesday.
Guillaume
Perret estimated the country’s coal exports could rise
from 36.7m tons in 2017 to 58m tons this year and 60m tons in 2019.
Citing a “structural shortage” of supply and a sharp year-on-year rise in seaborne coal prices, he also said the US’s high-sulphur coal has some advantages over supplies from competing origins.
“New power plants are being built with desulphurization systems, so the [US coal’s] high sulphur is not such an issue,” Perret said. “And many countries are looking to raise their caps on permitted sulphur content [in power generation] as they can see US coal is very competitive.”
Global import demand – for seaborne thermal coal, lignite, and some anthracite grades – could grow by nearly 5% on the year to 995m tons in 2018, while supply will rise 4% to just 976m tons, according to Perret Associate estimates.
The Global Coal Newcastle index has averaged USD 104/t in the first half of the year, up from USD 81/t in January-June last year.
Export destinations - Although the US used to export primarily to northwest Europe, it will likely take advantage of growing Asian and Mediterranean demand amid declining north European demand, Perret said.
“Also, the mines and logistics infrastructure are already there, so you don’t need a big investment to export more from the US,” he said, adding this was not the case for other producers, such as Australia and Russia.
US exports to India, for example, already reached 6.2m tons in the first half of 2018, compared with exports of 6.8m tons for all of 2017, he said.
Meanwhile, he said domestic coal demand in the US “will be flat at best, or erode slightly” over the coming years.
And demand from Europe is also on the wane, with the EU-15 countries expected to import just 90.2m tons of seaborne thermal coal this year versus 107m tons last year.
Citing a “structural shortage” of supply and a sharp year-on-year rise in seaborne coal prices, he also said the US’s high-sulphur coal has some advantages over supplies from competing origins.
“New power plants are being built with desulphurization systems, so the [US coal’s] high sulphur is not such an issue,” Perret said. “And many countries are looking to raise their caps on permitted sulphur content [in power generation] as they can see US coal is very competitive.”
Global import demand – for seaborne thermal coal, lignite, and some anthracite grades – could grow by nearly 5% on the year to 995m tons in 2018, while supply will rise 4% to just 976m tons, according to Perret Associate estimates.
The Global Coal Newcastle index has averaged USD 104/t in the first half of the year, up from USD 81/t in January-June last year.
Export destinations - Although the US used to export primarily to northwest Europe, it will likely take advantage of growing Asian and Mediterranean demand amid declining north European demand, Perret said.
“Also, the mines and logistics infrastructure are already there, so you don’t need a big investment to export more from the US,” he said, adding this was not the case for other producers, such as Australia and Russia.
US exports to India, for example, already reached 6.2m tons in the first half of 2018, compared with exports of 6.8m tons for all of 2017, he said.
Meanwhile, he said domestic coal demand in the US “will be flat at best, or erode slightly” over the coming years.
And demand from Europe is also on the wane, with the EU-15 countries expected to import just 90.2m tons of seaborne thermal coal this year versus 107m tons last year.
Comments
This is good news for
West Virginia, Wyoming and the US Trade Deficit.
Norb Leahy, Dunwoody
GA Tea Party Leader
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