Global seaborne coal trade on 2021 to grow more than 5% after 2020 slump: Assocarboni

Global seaborne coal trade volumes in 2021 are anticipated to grow more than 5% from 2020, with an additional increase seen for 2022 despite decarbonization programs, Assocarboni, the General Association of Coal Operators, forecast May 10.

“Seaborne trade will begin to grow again: a 5% upsurge in volumes traded is expected by the finish of 2021, with your final total figure of 1 1.21 billion mt,” Rome-based Assocarboni President Andrea Clavarino told S&P Global Platts within an emailed statement. “Specifically, thermal coal should amount to 947 million tons (+ 4% in comparison to 910 million in 2020) and metallurgical coal to 263 million tons (+6% in comparison to 247 million in 2020).”

“For 2021, we are witnessing a sharp go up in the prices of thermal and metallurgical coal, driven by the solid recovery of the economy and expectations of an exit from the pandemic,” Clavarino said.

Seaborne metallurgical coal delivered prices to China jumped to four-year high May 10 in the superior coking coal segment in firm investing in interest and limited spot availability, as Chinese steel production levels remained huge and the outlook for commodities continued generally bullish.

S&P Global Platts assessed High grade Low Vol steady in $109/mt FOB Australia, even while PLV CFR China was up $10/mt in $248/mt CFR China May 10.

Southeast Asia drives demand

The association, which groups together international coal users, traders and handlers, noted that demand for coal has shifted towards Southeast Asia and the upsurge in seaborne trade forecast for 2022 is driven by markets including Bangladesh, Malaysia, Pakistan, the Philippines and Vietnam. “Developing demand for coal from Bangladesh could keep import volumes large,” Clavarino said.

2020 saw a 10% on-year decline in seaborne coal trade volumes to at least one 1.16 billion mt - the first fall in volumes for a decade - as COVID-19 hit supply chains, countries and companies accelerated decarbonization programs and a commercial spat limited trade between Australia and China.

“We think that the decline in trade volume last year was as a result of pandemic and the reduced amount of imports in Europe, where in fact the decarbonization method has begun, but slowly but surely and only for a number of the Europe,” Clavarino said.

Italian coal phaseout

Assocarboni highlighted the circumstance of Italy, which includes planned to phase out the use of coal in electricity creation by 2025, and which already saw dramatic falls found in coal imports in 2020.

Italy’s thermal coal imports slumped last year to 5.3 million mt - down 29% from 2019’s 7.5 million mt - while its imports of metallurgical coal and PCI, at 2.35 million mt, were down 22% from 3 million mt in 2019.

“Coal phase-out ought to be progressive as time passes and closely connected to structural operations in the replacement creation capacities and found in the transmission, distribution and energy storage systems, in order to not compromise the competitiveness and safety of the Italian Electric power Program,” the association said.

Assocarboni believes that the Italian electricity system should improve the talk about of renewable energy found in its energy mix and hopes that the country should be able to properly address the gradual techniques for the closure of the plants, as previously done in other Europe.

“In a world that will continue to produce energy from coal, the mentioned Italian period out by 2025 will bring [only]modest advantages to the climate modification reduction, while the CO2 emissions because of Italian coal-fired plants account for 0.04% of the global CO2 emissions,” it said.

While Europe in 2020 produced electricity mainly from coal (13.3%) and nuclear (24.2%), reducing the costs of electric bills by the average 30%, Italy lagged behind, appearing the only country on the planet without nuclear vitality and with the cheapest share of coal use (10%), according to the association.

China, Germany, Japan, India, South Korea and Taiwan might continue to use a mix of coal and nuclear to produce energy beyond 2025, it observed.

“Coal confirmed its leadership as leading petrol for electricity generation also found in 2020, accounting for 38% of overall creation,” Assocarboni said.