Industry News
Strong Asian Market Demand, US Steam Coal Export Leaps to 5-Year High
According to Kpler's ship tracking data, as of August, the total export of coal used for power generation in the United States reached 22.5 million tons, up from 18.3 million tons in the same period in 2022. In percentage terms, the export growth rate of the United States is the largest among all major thermal coal exporting countries, even surpassing the 15.7% growth rate of Indonesia, the largest coal exporting country.
The strong growth of coal exports in the United States is in stark contrast to the decrease in coal used for domestic power generation. As part of the country's efforts to reduce fossil fuel emissions, the amount of coal-fired electricity generated in the United States has decreased by more than 50% since 2010.
The different trends in coal use and exports make it easy for the United States to be criticized for maintaining high coal exports while reducing domestic coal consumption, thereby exacerbating harmful global emission trends.
But the strong pace of exports also highlights that although domestic power producers in the United States are steadily reducing the proportion of coal in their power generation structure, demand for US coal continues.
The main consumer market in Asia accounts for 48% of the total exports of thermal coal from the United States, approximately 10.6 million tons, of which 7 million tons are exported to India, 1.3 million tons are exported to Japan, 1.1 million tons are exported to China, and 600000 tons are exported to South Korea.
Europe accounts for 26.6% of US exports, while the Netherlands is the second largest buyer with an import volume of 3.2 million tons. Germany, Spain, and Poland are other noteworthy European buyers, importing 1 million tons, 712000 tons, and 217000 tons, respectively.
Elsewhere, Egypt (1.9 million tons), Morocco (1 million tons), and the Dominican Republic (662000 tons) are other large buyers, highlighting the wide reach of the US coal market so far in 2023.
Although China and India are the two largest coal consuming countries in the world, with most of their coal demand coming from domestic production, imported coal still accounts for a portion of the total emissions from power plants.
According to data from think tank Ember, in 2022, these two countries accounted for over 70% of global coal electricity emissions, emitting over 5.4 billion tons of carbon dioxide and equivalent gases.
Japan, South Korea, the Philippines, Germany, and Poland accounted for 8%.
In the short term, the broad coal import market bodes well for US coal exporters, as long as US coal prices remain competitive with other supply countries, exports will rise again in the winter.
But in the long run, as more and more power generation companies promise to increase renewable energy supply and reduce coal imports, US coal exporters may begin to face difficulties finding buyers willing to purchase their products.
In addition, some major coal producers, including China, may increase their coal exports over time, even if their power producers follow the example of the United States and reduce their coal use in their power generation portfolios.
This may lead to increased competition with the United States in terms of coal export market share and a steady decline in US export potential over time.
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