Japan: Coking coal imports up 11% m-o-m in Jul'21 and 9% y-o-y in Jan-Jul'21

Japan's coking coal imports have totaled 25.21 million tonnes (mn t) in the first seven months of this year (Jan'21-Jul'21), up by 8.7% compared with 23.20 mn t during the corresponding period of last year (Jan'20-Jul'20).

Moreover, Japan had imported 4.08 mn t of coking coal in Jul'21, up by 10.9% m-o-m as against 3.67 mn t in Jun'21, according to the latest customs data compiled by CoalMint.

Furthermore, the country's coking coal imports were higher by as much as 44.2% y-o-y in Jul'21, contrasted with 2.83 mn t in Jul'20.

Japan's crude steel output surged on the year in July as auto steel demand gradually recovered with increased car exports but pressure remained from a shortage of automotive chips. Some Covid-19 restrictions remain in place even after the Japanese government lifted a third state of emergency in its major business and industrial areas of Tokyo, Osaka and Nagoya.

Australian coking coal exports to Japan rise in July

Australia, Canada, Russia and the United States have traditionally been the largest exporters of coking coal to Japan. These four countries typically supply about 95% of Japan's imported coking coal in any given period of time.

Japanese coking coal imports from top supplier Australia were recorded at 2.83 mn t in Jul'21, lower by 2.4% m-o-m from 2.90 mn t in Jun'21, but higher by 65.4% y-o-y from 1.71 mn t in Jul'20.

In the first seven months of 2021, Japan imported 18.02 mn t of coking coal from Australia during January-July, 26.3% higher when compared to 14.26 mn t imported in the same period a year ago.

Notably, since China instituted an unofficial boycott of Australian coal last October in a major escalation of the two countries' trade conflict, global flows of coking coal have undergone a major reshuffling. While Chinese imports of Australian coal have effectively dropped off to zero, imports from other countries such as India, Japan and South Korea have shot up to fill the gap.

Japan's coking coal imports from major exporting nations slip on month in July

Japan saw its coking coal imports from Canada and Russia decreasing by 20.7% and 3.7% respectively in the year to date.

More importantly, US coking coal exports to Japan witnessed a substantial drop of 56.2% to 71,064 t in Jul'21, as against 162,266 t in Jul'20.

US coking coal exports to Japan fell to their lowest in July 2021, as US suppliers focused on securing sales with Chinese buyers willing to pay a premium for US coals amid the ongoing unofficial ban on Australian coal.

The following table provides a detailed breakup of commodity-wise coal import shipment volumes from the exporting countries.

Outlook

As seaborne coking coal prices extended gains on continued Australian coal supply tightness amid firmer global steel demand, Japan's crude steel output made a sharp recovery from a year earlier but dipped from May with weaker demand from the domestic auto sector.

A global shortage of semiconductor chips and some auto components are hindering Japanese auto manufacturing.

The country's economy remains susceptible to a resurgence of Covid-19 infections as a state of emergency in Tokyo is expected to expand to neighboring prefectures.