World Seaborne Coal Trade fell 1.5 pct in 2016
World coal seaborne trade fell 1.5 percent last year due, among other reasons, to a slowdown in big exporter Venezuela and less demand in the United States, German coal import lobby VDKI said on Friday.
VDKI, whose 69 member companies buy supplies from countries such as Russia, Colombia, Australia and South Africa, put world coal seaborne trade - imports and exports - last year at 1.1 billion tonnes. World coal demand was 7 billion tonnes.
Following are highlights from a speech delivered at VDKI's annual reception on Jan. 13 by Chairman Wolfgang Cieslik.
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- Future coal demand should remain underpinned by rising consumption in India and South East Asia, offsetting declines in Europe, China and the U.S.
- Producer prices of steam coal for power plants were low in 2015, except for those in Russia, which achieved levels well above free-on-board costs, before doubling in 2016.
- The price driver was China, which switched to higher quality coal, prompting lower quality producers to curb output, including important supplier Indonesia.
- China also introduced tighter labour regulations, which resulted in domestic output cuts.
- Its mines may produce more whenever world prices rise under a mechanism that influences coal prices on futures exchanges.
- Prices of coking coal, used by steelmakers and typically provided by Mozambique, the U.S., Canada and Australia, rose in 2016 after falling in 2015, allowing profits for producers and importers.
- The Australian coking coal benchmark trebled to over $250 a tonne last year and for first quarter 2017 it is indicated at $285.
- India is trying to turn from importer to exporter, rivalling Indonesia, but VDKI reckons it will be difficult to achieve this.
Reporting by Vera Eckert
