Asia's thermal coal imports slip from record as winter demand relieves: Russell

Asia's imports of seaborne thermal coal reduced from record highs in January as leading buyers China and India saw arrivals ease.

There was strength in Japan and South Korea, which assisted drive some divergence in prices in between the high-energy coal preferred by the third- and fourth-biggest importers in Asia, and the lower quality fuel looked for by China and India.

Asia seaborne imports of thermal coal, utilized generally to create electricity, dropped to 77.65 million metric loads in January, according to information compiled by product analysts Kpler.

This was 5% below the record high of 81.8 million loads imported in December, which was mostly driven by strong demand in China and India.

It's also worth keeping in mind that in spite of the drop in arrivals in January, it was still fourth-highest ever month for Asia, the top-importing area of thermal coal.

China's January imports of seaborne thermal coal slipped to 27.92 million lots from December's all-time peak of 31.59 million, however were still 34% above the 20.86 million from January 2023.

China's hunger for imported coal has been sustained by strong demand for thermal generation amid lower output from hydropower, along with by a rate benefit compared to domestic coal rates.

The primary grades imported by China are lower-energy coal from Indonesia and mid-rank fuel from Australia.

Indonesian coal with an energy content of 4,200 kilocalories per kilogram (kcal/kg), as examined by product cost reporting firm Argus, ended at $56.53 per metric load in the week to Feb. 9, down from its pre-winter peak of $61.70 reached in late October.

Australian coal with an energy content of 5,500 kcal/kg ended up recently at $94.44 a load, down a little from $95.02 the previous week, but still locked within a tight $2 variety anchored around $94 that has continued because the start of November.

India's seaborne thermal coal imports dropped to 13.42 million lots in January, the third-straight decline and the weakest because August last year, according to Kpler.

Similar to China, India's imports stay substantially stronger on a year-on-year basis, increasing 27.2% from the 10.55 million tons in January 2023.

JAPAN'S BOOST

Japan's imports of seaborne thermal coal climbed to 11.24 million tons in January, up from December's 9.99 million, and the strongest month given that January 2023's 11.54 million.

Japan's imports normally peak in December and January each year amid winter demand, and the pattern and volumes over the present cooler period are mostly the like the prior winter.

The price of Australian 6,000 kcal/kg coal, the grade preferred by both Japan and South Korea, ended at $ 120.16 a load in the week to Feb. 9, up a little from the previous close of $117.28.

The price peaked this winter season at $149.12 a lot in the week to Dec. 15, which fits with the information showing stronger imports in January.

Comparable to Japan, South Korea's seaborne thermal coal imports also peaked in January, with arrivals of 7.92 million heaps, up from December's 7.32 million and the strongest month because July in 2015.

Preliminary vessel-tracking for February suggests that Asia's. huge four importers will see lower arrivals.

Given that supply from leading exporters Indonesia and Australia. seems holding up, this makes it likely that rates will. come under downward pressure.

The viewpoints expressed here are those of the author, a columnist. .

(source: Reuters)