Australian coal exports peaked in 2019 at 396 MMT and since then have fallen back to 371 MMT in 2020 and 366 MMT in 2021 in part due to the reduction in energy demand due to Covid in 2020 but mainly due to the Chinese effectively stopping coal imports from Australia from October 2020. The change in trading patterns saw more Australian coal moving for instance into India (72 MMT in 2021 up nearly 20 MMT y-o-y) as China took a greater proportion of Indonesian coal. Today we are witnessing a further change in trading patterns as Indian buyers baulk at record prices for coal (Australian thermal coal prices traded last week at $371/ton (+$278/+401% y-o-y), with met coal prices traded north of $500/ton (+$391/+454%); whilst more European buyers are replacing some of this shortfall, since embargoes have started being placed by Europe, on Russian coal.

Some of Australia’s more traditional markets are also growing as coal remains the cheapest energy source; Japanese demand for Australian coal increased to 120 MMT last year(up 16 MMT y-o-y) and will no doubt further expand now that Japan has stopped importing coal from Russia. South Korea took increased imports from Australia to 61 MMT in 2021 (up 15 MMT y-o-y), whilst Taiwan imported an extra 6 MMT coal in 2021 to total 37 MMT. Other notable increases in exports from Australia were Indonesia (up 3.5 MMT to 9 MMT) and Thailand up 3 MMT to 7.5 MMT). Only Vietnam of Australia’s regular customers fell back by 5 MMT in 2021 to 16 MMT.

Despite reductions in volumes tonne-mile demand on dry cargo has benefited from these changes in trading patterns with both longer sea miles into India markets (plus increased port stays) and more latterly Europe. Due to economies of scale and more competitive freight, Capesizes and to a lesser extent Post Panamax’s are now carrying a greater share of Australian coal.