Global maritime trade volumes of coal in 2021 are expected to increase by more than 5% from 2020, with a further increase for 2022 despite decarbonization programs, according to Assocarboni, the General Association of Coal Operators, according to forecasts. May 10.
“Maritime trade will start to grow again: a 5% increase in volumes traded is expected by the end of 2021, with a final total figure of 1.21 billion tonnes,” said the president of Assocarboni based at Rome, Andrea Clavarino, to S&P Global Platts in an emailed statement. . “In particular, thermal coal should amount to 947 million tonnes (+ 4% against 910 million in 2020) and metallurgical coal to 263 million tonnes (+ 6% against 247 million in 2020).”
“For 2021, we are witnessing a sharp rise in the prices of thermal and metallurgical coal, driven by the strong recovery of the economy and the expectations of an exit from the pandemic,” Clavarino said.
Metallurgical coal sea-delivered prices to China hit four-year high on May 10 in premium coking coal segment due to firm buying interest and tight on-time availability , as Chinese steel production levels have remained high and the outlook for commodities has remained generally bullish.
S&P Global Platts valued Premium Low Vol stable at $ 109 / t FOB Australia, while PLV CFR China was up $ 10 / t at $ 248 / t CFR China on May 10.
Southeast Asia drives demand
The association, which brings together international coal users, traders and handlers, noted that demand for coal has shifted to Southeast Asia and the increase in maritime trade forecast for 2022 is being driven by markets such as Bangladesh, Malaysia, Pakistan, the Philippines and Vietnam. âThe growing demand for coal from Bangladesh will keep import volumes at a high level,â Clavarino said.
2020 saw a 10% year-on-year drop in maritime coal trade volumes to 1.16 billion tonnes – the first drop in volumes in 10 years – as COVID-19 hit supply chains , countries and companies have accelerated decarbonization programs and limited trade between Australia and China.
“We believe the decline in trade volume last year is due to the pandemic and reduced imports in Europe, where the decarbonization process has started, but gradually and only for some European countries,” Clavarino said.
Phasing out of Italian coal
Assocarboni highlighted the case of Italy, which has plans to phase out the use of coal in power generation by 2025, and which has already seen dramatic declines in coal imports in 2020.
Italy’s imports of thermal coal fell last year to 5.3 million mt – down 29% from 7.5 million mt in 2019 – while its imports of metallurgical coal and PCI, to 2 , 35 million mt, were down 22% from 3 million mt in 2019.
“The phase-out of coal must be gradual over time and closely linked to structural operations in replacement production capacities and in energy transport, distribution and storage systems, so as not to compromise competitiveness and security of the Italian electricity system, âsaid the association. noted.
Assocarboni believes that the Italian electricity system should increase the share of renewable energies in its energy mix and hopes that the country will be able to properly address the gradual procedures for shutting down plants, as has already been done in other European countries. .
âIn a world that will continue to generate electricity from coal, Italy’s phasing out by 2025 will bring [only]modest benefits for reducing climate change, as CO2 emissions from Italian coal-fired power plants represent 0.04% of global CO2 emissions, âhe said.
While Europe produced electricity mainly from coal (13.3%) and nuclear (24.2%) in 2020, reducing the costs of electricity bills by 30% on average, Italy lagged behind, being the only country in the world without nuclear power and with the lowest share of coal use (10%), according to the association.
China, Germany, Japan, India, South Korea and Taiwan will continue to use a mix of coal and nuclear power to generate electricity beyond 2025, he noted.
“Coal has confirmed its leadership as the main fuel for power generation also in 2020, accounting for 38% of total production,” Assocarboni said.