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Seaborne Coal Trade Looking for Recovery After Dismal 2020

Japan is among the major markets when it comes to the global seaborne trade. However, 2020 proved to be a rather dismal year for coal. So far though, 2021, is proving to be much better, with volumes increasing every month that goes by. In a recent weekly report, shipbroker Banchero Costa said that “2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-year to 1130 million tonnes, according to data from Refinitiv. In 2021 things started pretty badly, but we are seeing increasing signs of things returning back to “normal”. In the first 7 months of 2021, global seaborne coal trade increased by +2.5% y-o-y to 681.8 mln tonnes, from 665.1 mln tonnes in the January-July 2020 period. However, this is still down -10.2% from 759.4 mln tonnes in the same period of 2019. However, the worst was in the first quarter, as 1Q 2021 recorded a -8.2% y-o-y decline to 278.1 mln t”.

Source: banchero costa &c s.p.a.

According to Banchero Costa, “things have steadily improved month after month. In the second quarter of 2021, global coal loadings reached 298.3 mln tonnes, which was +8.7% y-o-y compared to 2Q 2020. Global coal trade has been steadily climbing month after month, and in July 2021 reached 105.4 mln tonnes, which was +20.1% up from July 2020, and only -5.1% down from July 2019. Japan is the third largest importer of coal in the world, after Mainland China and India. In 2020, Japan was the destination for 15.0% of global seaborne coal shipments. However, imports into Japan have steadily declined over the years, even before Covid, due to limited economic growth and greater reliance on natural gas and renewable energy sources, as well as the restarting of previously shut nuclear power plants. Japan’s seaborne coal imports in the 12 months of 2020 declined by -4.0% y-o-y to 166.8 mln tonnes”.

The shipbroker added that “let’s keep in mind though that even in 2019 imports into Japan declined by -2.7% y-o-y, and in 2018 they declined by -0.5% y-o-y. When it comes to last year, the worst was in the third and fourth quarters. In 1Q 2020, Japan imported 45.7 mln tonnes of coal, which was a positive +3.2% y-o-y increase. In 2Q 2020, imports continued at 39.8 mln tonnes, fairly flat at +0.3% y-o-y (2Q has been seasonally weak for a number of years). In 3Q 2020, imports into Japan stayed at 39.8 mln tonnes, but this was actually down -10.5% y-o-y from the same quarter in 2019. In 4Q 2020, imports nudged upwards to 41.5 mln tonnes, but this again was down -8.4% y-o-y”.

Source: banchero costa &c s.p.a.

Banchero Costa also noted that “volumes nudged up again in the first quarter of 2021, with Japan importing 44.6 mln tonnes of coal, which was a -2.4% y-o-y decline from the levels of 1Q 2020. The second quarter of 2021 was very weak, with just 37.9 mln tonnes, down -4.8% y-o-y from the second quarter of last year. In July 2021 things suddenly improved quite a lot, with 15.6 mln tonnes, which was +26.2% up month-on-month from June 2021, up +9.3% y-o-y from July 2020, and almost identical to the 15.9 mln tonnes recorded in July 2019. Overall in the first 7 months of 2021, Japan imported 98.1 mln tonnes of coal, which was down -1.7% y-o-y from the same period in 2020. In terms of sources of coal imports to Japan, things changed a lot. Australia, which was already the top coal exporter to Japan, further increased volumes as they had to divert the cargoes that in the past they would have sold to China. Imports to Japan from Australia increased by +9.9% y-o-y to 64.7 mln t in the first 7 months of 2021, from 58.8 mln tonnes in the same period of 2020. Australia now accounts for 66% of Japan’s coal imports. The second largest source for Japan’s coal imports is Indonesia, accounting for a 12% share. Shipments from Indonesia to Japan declined by -26.3% y-o-y to 11.9 mln tonnes in the first 7 months of 2021, from 16.2 mln tonnes in the same period of 2020”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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