South Korea: Coking coal imports plunge to seven-month low in May
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South Korea's coking coal imports plummeted to a seven-month low of 1.46 million tonnes (mn t) in May'20, down by 31.7% month on month as compared to 2.13 mn t in Apr'20, according to the latest customs data compiled by CoalMint Research.
The country's coking coal imports also contracted by 32.4% year on year in May'20, as against the import volume of 2.15 mn t in May'19.
Furthermore, South Korean coking coal imports have totalled 9.09 mn t in the first five months of this year (Jan'20-May'20), down by 3.4% compared with the aggregate volume of 9.41 mn t coking coal imported during the corresponding period of last year (Jan'19-May'19).
Major Coal Exporters to South Korea in Jan-May'20:
Australia, Canada, Russia and the United States have traditionally been the largest exporters of coking coal to South Korea. These four countries typically supply about 95% of South Korea's imported coking coal in any given period of time.
South Korean coking coal imports from Australia were recorded at 411,190 t in May'20, lower by 40% month on month from 687,948 t in Apr'20, and 50% year on year below 821,880 t in May'19.
In the first five months of 2020, however; South Korea imported 3.55 mn t of coking coal from Australia during January-May, 2.5% higher when compared to the same period a year ago.
Meanwhile, the country saw its coking coal imports from Canada and Russia declining year-over-year by 5.5% and 22.2% respectively in the year to date.
Notably, US coking coal exports to South Korea witnessed a substantial rise of 18.9% during Jan-May'20 totalling 1.15 mn t, against 0.97 mn t in the corresponding period of 2019.
The following table provides a detailed breakup of shipment volumes from the exporting countries.
| Country | May'20 | Apr'20 | M-o-M Change | May'19 | Y-o-Y Change | Jan-May'20 | Jan-May'19 | YTD Change |
| Australia | 411,190 | 687,948 | -40.2% | 821,880 | -50.0% | 3,546,380 | 3,460,250 | 2.5% |
| Canada | 430,123 | 698,799 | -38.4% | 419,030 | 2.6% | 2,328,474 | 2,462,916 | -5.5% |
| Russia | 277,552 | 272,904 | 1.7% | 504,980 | -45.0% | 1,590,769 | 2,045,106 | -22.2% |
| USA | 281,583 | 331,625 | -15.1% | 304,728 | -7.6% | 1,150,456 | 967,367 | 18.9% |
| Indonesia | 55,300 | 165,300 | 55,000 | 200.5% | ||||
| China | 53,800 | 24,055 | 142,900 | 216,745 | -34.1% | |||
| Others | 86,434 | 77,516 | 163,434 | 201,582 | -18.9% | |||
| TOTAL | 1,455,748 | 2,131,510 | -31.7% | 2,152,189 | -32.4% | 9,087,713 | 9,408,966 | -3.4% |
Source: South Korean Customs | Quantity in tonnes (t)
COVID-19-led steel production cuts are weighing on coking coal demand
South Korean spot demand for seaborne coking coal has been dampened by massive steel output cuts, due to depressed end-user demand and mounting finished steel inventories with production scaled back aggressively as the coronavirus pandemic continues to ravage downstream demand for steel.
Construction and manufacturing activities have remained relatively slow in the past few months, while automotive-grade steel demand has collapsed following a sharp contraction in vehicle sales. Earlier in February this year, the vast majority of South Korean automakers were compelled to cease operations because they were unable to source vital parts from their facilities in China during the lockdown period.
South Korea's imports of coking coal were particularly hard hit as steel demand slumped amid the virus outbreak in Feb'20, dropping to 1.59 mn t from 1.97 mn t in Jan'20 and 2.07 mn t in Feb'19.
Subsequently with the Covid-19 pandemic strongly hitting the manufacturing sector in April, several major South Korean steel producers have been forced to curtail production in line with the country's carmakers halting their output.
South Korea's steelmaking giant POSCO has lowered its production and sales forecasts for 2020 by 7% -- partially attributing the decline to reduced demand from the auto sector. Archrivals Hyundai Steel and Dongkuk have also followed suit. Both the companies have reduced production days at their electric arc furnaces since Q1 2020.
Steel demand from South Korea's domestic automakers fell in the first quarter of this year as vehicle sales to the export market shrunk by double digits. Demand is expected to sink deeper in the current quarter as the country's automakers further slash production.
Reported by Aditya Sinha
