Europe Coal Imports Retreating Fast

Coal demand is increasingly moving towards the East, as European cargoes are gradually reducing. In a recent weekly report, shipbroker Banchero Costa said that “demand for coal continues to experience sharply differing fortunes in the Atlantic and Indo/Pacific basins. Whilst coal consumption continues to grow in countries such as China, India, and Vietnam, the opposite is true in Europe. Europe is still a major market for the world’s coal exporters, with numerous European countries handling substantial import volumes. In recent years though, annual import volumes have declined greatly, and the downward trend is clearly continuing in 2019”.

According to Banchero Costa “a further weakening in the future seems likely, amid sustained pressure from energy policy influences focused on decarbonisation which are diminishing the role of coal. Coal demand in Europe continues to shrink as a result of coal plant closures and rising renewables-based power generation, together with a combination of higher carbon and low natural gas prices, as well as slow economic growth and improved energy efficiency. In 2018, total seaborne coal imports into Europe (excluding Russia and Turkey) totalled 138.0 mln tonnes, or about 12 percent of global seaborne coal trade. This included 42.4 mln tonnes discharged in the Netherlands (mainly at Rotterdam, Amsterdam, Ijmuiden, Eemshaven), 18.3 mln tonnes in Spain (mainly at Gijon, Tarragona, El Ferrol, Carboneras, La Coruna), 13.2 mln tonnes in Italy (at Brindisi, Civitavecchia, La Spezia, Porto Torres, Taranto, Trieste), 13.1 mln tonnes in Germany (Bremen, Hamburg, Nordenham, Rostock, Wilhelmshaven), 8.2 mln tonnes in Ukraine (Nikolaev, Odessa, Yuzhny), 7.8 mln tonnes in France (Dunkirk, Fos), 7.3 mln tonnes in Poland (Gdansk, Gdynia, Swinoujscie), 6.7 mln tonnes in the UK (Belfast, Immingham, Port Talbot)”.

The shipbroker also noted that “in the first 11 months of 2019, based on Refinitiv vessel tracking data, Europe’s coal imports (including both thermal and metallurgical) are down to 105.7 mln tonnes from 124.7 mln tonnes in the same period last year, indicating a -15.2 percent reduction year-on-year. The largest importer in Europe this year were the Netherlands with 35.9 tonnes of coal in the first 11 months of 2019, followed by Germany with 10.8 mln tonnes, Spain with 10.5 mln tonnes, Italy with 7.9 mln tonnes, Ukraine with 6.6 mln tonnes, France with 6.6 mln tonnes, Poland with 6.1 mln tonnes, the UK with 3.3 mln tonnes. The respective figures for the first 11 months of 2018 were: the Netherlands with 38.7 mln tonnes, Spain with 16.6 mln tonnes, Germany with 11.9 tonnes, Italy with 11.8 mln tonnes, Ukraine with 7.6 mln tonnes, France with 7.1 mln tonnes, Poland with 6.2 mln tonnes, the UK with 6.0 mln tonnes”.

Banchero Costa commented that “there has also been some reshuffling in trade patterns, as some suppliers prove more resilient than others. Russia remains at the top spot in the first 11 months of 2019 as the largest supplier of coal to Europe with 33.9 mln tonnes, +0.9 percent y-o-y and now accounting for 32 percent of Europe’s total coal imports. The USA shipped 23.2 mln tonnes of coal to Europe in Jan-Nov 2019, still in second place but down -12.1 percent y-o-y. Australian shipments were steady at 15.2 mln tonnes, -1.3 percent down y-o-y. However, imports from Columbia crashed to 13.9 mln tonnes in the 11 months of 2019, that is -32.9 percent down on the same period last year, and -46.3 percent down from 2017. Still, Colombia is the source for 13 percent of Europe’s seaborne coal imports. Similarly, South African coal imports to Europe declined drastically to a poor 2.8 mln tonnes, down -41.7 percent y-o-y. Out of the total coal volumes exported to Europe so far this year, roughly 34 percent were shipped on Capesize or Post-Panamax vessels, 41 percent on Panamaxes, 16 percent on Supramaxes/Ultramaxes, 10 percent on smaller units”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide