South African thermal coal exports remain stable in CY20 amid changed trade dynamics
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While COVID-19 pandemic played havoc on commodities market, South African thermal coal exports in 2020 stood almost at the previous year's level of 74.2 mn t, CoalMint's vessel lineup data reveals.
Continuing the trend, India remained the top export destination for South African coal but
exports to the country declined by 11% and stood at 41.1 mn t. Reduced energy demand in
India due to COVID-led lockdown coupled with increased availability of domestic coal were
the key reasons.
South Africa's coal exports to South Korea also registered a significant decline of 59% y-o-y
at 1.5 mn t amid COVID-induced lower energy demand, increased LNG usage and shutdown of the inefficient coal-fired power plants amidst pollution concerns.
South Africa also diversified its exports to new destinations like Vietnam, China, Sri Lanka,
and Turkey during the year. With South African coal prices touching their lows in 2020, Vietnam stepped in to buy it at reasonable prices registering a dramatic increase in its coal imports from South Africa.
On the other hand, Chinese ban on Australian coal made the former to look for other sources like South Africa to meet its requirements. Because of the increased coal demand from China and higher price advantage, Russia, a key coal exporter to Turkey also diverted its coal to China, giving an opportunity to South African coal exporters to tap the Turkey market also.
Pakistan, the second favourite export destination for South African coal, registered an
increase of 10% y-o-y and its imports stood at 11.8 mn t. This rise was majorly driven by
improved cement demand in Pakistan amid government's boost to the construction sector.
Outlook
In the near term, South African coal exports are likely to get support due to increased
demand from China, Pakistan and South Korea amid cold weather. In case of India however, South African exports to the country is likely to experience a setback as the country is focusing on increasing domestic coal availability.
