Dry Bulk Market: Japan’s Coal Imports in Q1 2020 A Boost for Dry Bulk Owners

Dry bulk owners have started to see improved earnings during the past few days and this could be down to Asia’s return to business. In its latest weekly report, shipbroker Banchero Costa said that “coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19. We have seen China’s coal imports surge by +14.1% year-on-year in the first quarter of this year. We have also seen India’s coal imports similarly surge by +7.1% year-onyear in the same period. Japan is another country which has increased its imports of coal this year, albeit perhaps not by the same magnitude as those other two countries”.

According to Banchero Costa, “in the first 3 months of 2020, Japan imported 44.8 mln tonnes of coal, according to vessel tracking data from Refinitiv. This represents a net increase of +3.4% y-o-y, compared to the 43.3 mln tonnes imported in the same three-month period of 2019, but down -3.4% from the 46.3 mln tonnes imported in 1Q 2018. On a single-month basis, January showed a +6.0% year-on-year increase to 15.7 mln tonnes, whilst February showed a +4.4% increase year-on-year to 14.3 mln tonnes, and March recorded a -0.2% yearon-year decline to 14.7 mln tonnes. In April 2020 we could see arrivals as high as 15.2 mln tonnes, based on vessel tracking ETAs. This would be significantly higher than the low 13.1 mln tonnes of April 2019”.

The shipbroker added that “actual arrivals in the first 14 days April 2020 reached 6.8 mln tonnes. Of the arrivals in 1Q 2020, at least 18.0 mln tonnes were coking coal, and at least 23.6 mln tonnes were thermal coal, with 3.1 mln tonnes of unknown grade. Coal imports to Japan are predominantly from Australia, which also this year accounts for 61% of Japan’s total. There have been some interesting shiftsin trade patterns however. Shipments from Australia to Japan have been down by -1.5% y-o-y in 1Q 2020, to 27.3 mln tonnes, from 27.7 mln tonnes in the same period last year. Volumes from Indonesia to Japan, on the other hand, increased sharply by +27.0% y-o-y to 8.3 mln tonnes, from 6.5 mln tonnes in 1Q 2019. Indonesia now accounts for 19% of Japan’s total coal imports”.

Banchero Costa added that “Japan also boosted imports from Canada, which went up by +12.3% y-o-y to 3.5 mln tonnes in 1Q 2020. Imports from Russia also increased by +9% year-on-year to 3.7 mln tonnes, edging above Canada. Imports from the USA continued to decline. Japan imported only 0.9 mln tonnes from the USA in the first quarter of 2020, down -46.3% year-on-year. This is also twothirds down from the 2.5 mln tonnes recorded two years ago. We should keep in mind however that all this is a rebound from a relatively poor 2019, and indeed from a negative trend seen already for a number of years. Looking back at last year, Japan’s total imports reached 169.2 mln tonnes in the 12 months of 2019”.

“This represents a decline of -4.5% y-o-y, compared to the 177.2 mln tonnes imported in the whole of 2018. This in turn was a -1.2% decline from the 179.3 mln tonnes of 2017. One main trend seen in the past few years was towards diversification of suppliers. During the whole of 2019, imports from Australia to Japan declined by -7.2% y-o-y to 104.3 mln tonnes. Imports from Indonesia declined by -4.6% y-o-y in the whole of 2019 to 25.0 mln tonnes. On the other hand, shipments from Canada increased by +13.5% y-o-y to 15.6 mln tonnes, and from Russia by +13.2% y-o-y to 14.4 mln tonnes”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide