Despite the current doom and gloom environment with announcements of the accelerated closure of coal-fired power plants in Western Europe, Wattsight's coal analysis partner Perret Associates still anticipate steam coal seaborne imports to exceed marginally 1bn tonnes in 2019 at 1,005 m tonnes, down only 6 m tonnes from the recent record of 2018.
In fact, Perret Associates envisage seaborne steam coal imports to remain above 1bn tonnes until at least 2023, before a gradual but slow erosion thereafter. Some key points addressed in the latest Long Term Price Forecast, Steam Coal and Freight 2019-35.
Chinese steam coal imports could fall by a non-negligible 12% y-o-y to 187m tonnes, which could be partially offset by a 10% surge in Indian imports to 176m tonnes. Perret Associates also anticipate a step-up in the Philippines and Vietnamese imports demand – each by more than 2m tonnes – to 26m tonnes and 25mt tonnes, respectively. As a result total, steam coal demand could erode only marginally in India-Pacific at 825m tonnes in 2019 from 826.5m tonnes in 2018. A big question mark is whether Indonesian mining companies will increase their production and exports, as some of them are indicating, or to the opposite reduce production as the government is pushing to cap output.
European and Mediterranean
Combined European and Mediterranean imports erode by 3% in 2019 to 148.7m tonnes, with increased Turkish and Egyptian demand partially offsetting an 11.3m tonnes drop in northwest European. Steam coal prices remain increasingly driven by supply, or rather the lack of it.
Perret Associates envisage flat Colombian exports in 2019 at 79.8m tonnes due to legal hurdles to be approved to open new mines.
US exports could decline this year, by estimated 9% to 47m tonnes, as European delivered prices have fallen significantly (to the low $70/t) in early 2019 vs. their peak at $102/t in 2018. In addition, US domestic coal production keeps falling and inventories are relatively low.
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