South African Coal Export to India Surges by 13% Y-o-Y in CY19

The rising opposition of coal usage for power generation (especially by developed countries) due to high carbon emissions seems to steadily impact fossil fuel exports of one of the major coal exporting country, South Africa.

According to the data maintained by CoalMint research, the country's total coal exports have moved down by 5% y-o-y basis from 78.4 MnT in CY18 to 74.5 MnT in CY19.

Subsequently, the country now has to rely more on markets in Indian subcontinent like India, Pakistan and Bangladesh, in a bid to find buyers for its product. The South African coal exports to India has increased from 36.3 MnT in CY18 to 41.1 MnT in CY19, up by 13% y-o-y whereas in case of Pakistan the same has surged from 9.4 MnT in CY18 to 10.7 Mnt in CY19 (up by 13% y-o-y). The exports to Bangladesh increased by 46% y-o-y and stood at 1.1 MnT.

Until a few years ago, South Africa was able to benefit from its central location to supply both the Atlantic and the Pacific markets, enjoying the role of swing supplier. This is not the case anymore, as the European coal market has been rapidly shrinking due to investment in renewables and poor economic growth, and is also affected by cheap coal exports from Russia. As a result, South African coal exports to two key European countries Spain and Netherlands plunged from 5.44 MnT in CY18 to 1.93 in CY19.

In case of Southeast Asia, the country is unable to aggressively penetrate into lucrative coal markets of South Korea, and Taiwan as it struggles to be price-competitive with Indonesian and Australian exports. The South African coal exports to South Korea plunged by 41% y-o-y basis in CY19 and stood at 3.57 MnT whereas to Taiwan dropped by 56% y-o-y and stood at 1.32 MnT.