The EU still imports coal by sea. The main beneficiaries are mines from the United States and Australia

By Marek Grzybowski

Global coal trade has picked up pace this year and has now fully returned to pre-COVID levels. In the January-August 2024 period, coal deliveries by sea remained at a similar level to last year, or even increased. Coal supply on maritime routes increased by 2.5% y/y to 900.7 million tonnes, according to data from AXS Marine, cited by Banchero Costa Research.

Coal is still an element of energy security for many countries and a source of lucrative profits for leading suppliers to the EU, the United States and Australia. Bulk carrier operators and bulk terminals, including those in Gdynia and Gdańsk, also share in these profits.

In 2020-2021, between 6 million and 12 million tonnes of coal reached European ports per month. In 2022, peak transshipment in bulk terminals exceeded 12 million tonnes. In 2023, it will be between 4 and 7 million tonnes, and in 2024 only about 5 million tonnes.

After falling demand in February and March this year, exporters once again felt the demand for this energy raw material. In the period January-August 2024, exports from Indonesia increased by 8.3% y/y to 345.3 million tons, and from Australia increased by 3.3% y/y to 232.6 million tons. This happened at the expense of Russia, whose coal exports fell by 14.1% y/y to 110.7 million tons in the period January-August 2024.

Suppliers from the USA benefited from this, whose exports increased by 6% y/y to 59.4 million tons, while South African mines reduced the supply of coal on the international market by 4.1% y/y to 38.9 million tons – Banchero Costa Research experts calculated.

Coal deliveries from Colombia increased significantly, by 12.0% y/y to 39.6 million tonnes in January-August 2024. The activity of Canadian miners on the international market decreased slightly, because this year deliveries from this country fell by 0.3% y/y to 32.6 million tonnes. From Mozambique, freighters exported 11.2% y/y less coal this year, to only 14 million tonnes.

China the main player

China has been the main player on the international coal market for years. Coal imports by sea by the PRC energy and industry sector increased by 11.6% y/y to 267.8 million tonnes in January-August 2024. India also received 9.5% more coal by ships than last year. In the first half of this year, 165.6 million tons of this raw material were unloaded in Indian bulk ports. Japan cannot do without it, which imported 100.5 million tons this year until August 2024, but this was 7.3% less y/y.

South Korea’s bulk terminals also recorded a decrease in unloading. The country’s industry decreased demand by 6.4% y/y to 75.2 million tons. On the other hand, Vietnam’s economy provided suppliers with an increase in demand by 24.9% y/y to 40.1 million tons, and in Taiwan imports fell by -3.9% y/y to 38.4 million tons in the period January-August 2024.

The European Union is currently the fifth largest seaborne importer of coal in the world with annual imports at around 80 million tons.

EU industry still needs coal
The share of energy products in total EU imports fluctuated significantly in 2020-2023, as well as in the second quarters of 2023 and 2024, due to the high volatility of their prices. Cyclical surges and speculative turbulences meant that the peak of supplies in terms of value and volume was reached in 2022, which was clearly visible in the bulk, fuel and gas terminals of EU ports, including Poland. The prices of energy raw materials increased by 22.7% – Eurostat statisticians calculated.
This period was followed by a significant drop in prices in 2023, which continued into the second quarter of 2024. Analysis of the EU’s dependence on individual raw materials shows that the share of petroleum oils in total EU imports increased by 0.9% in the second quarter of 2024 compared to the same quarter of 2023. On the other hand, the share of liquefied natural gas and natural gas in a gaseous state decreased by 1% in the same period, Eurostat found. The EU market is therefore not a significant player in global turnover. It occupies a distant position after China, India, Japan and South Korea. “In 2023, the EU accounted for 6.6% of global seaborne coal supplies. EU seaborne coal imports increased by 38.2% y/y in 2022 to 127.6 million tonnes as a result of lower gas imports from Russia, but have now weakened again. In 2023, European seaborne imports fell sharply by 30.4% y/y to just 88.8 million tons, the lowest level in recent years after (Covid-affected) 2020,” Banchero Costa Research experts calculated. European countries are returning to the previous structure of energy production, when coal was gradually abandoned as an energy source and natural gas and renewable sources were placed. A larger decline in European coal imports was recorded by 7.6% y/y in 2018, by 18.3% y/y in 2019, by 32.9% y/y in 2020. Now again, in the period January-August 2024, the EU imported only 39.9 million tonnes, which is a 38.2% y/y decrease and the lowest level since 2019.
Coal imports by source in the first eight months of 2022-2024; source: Banchero Costa

USA the main supplier
In terms of supply sources, until 2021, Europe was strongly dependent on Russia. In 2021, as much as 38.3 million tonnes. As a result, 44% of seaborne coal imports to the EU came from Russian ports. From 2022, this situation has changed drastically. As a result of the war in Ukraine, imports fell to 23.5 million tonnes in 2022. In January-December 2023, EU coal imports from Russian ports fell by 83.6% y/y to just 3.9 million tonnes.
In 2023, EU ports imported 4.3% of coal from Russian ports, which also includes Kazakh coal shipped through Russian ports. In January-August 2024, imports from Russian ports fell by 19.7% y/y to just 1.9 million tonnes, or just 4.8% of total coal imports to the EU.

The most important supplier of coal to Europe in the first half of 2024 was the United States, which provided 29.3% of European demand for this energy raw material. In 2022, coal deliveries by bulk carriers from the US increased by 60.5% y/y to 26 million tonnes, but in 2023 they decreased by 7% y/y to 24.2 million tonnes. In the period January-August 2024, 11.7 million tonnes of this raw material were unloaded at EU coal terminals. The second largest supplier to Europe is Australia. Over 25% of coal deliveries reach the EU market from the Antipodes. In 2022, imports of this energy raw material from Australia increased by 30.8% y/y to 20.9 million tonnes, but in 2023 they decreased by 1.8% y/y to 20.6 million tonnes. In the period January-August 2024, coal volumes from Australia to the EU decreased by 6.3% y/y to 10.6 million tonnes. Colombia is the third largest coal supplier to the EU with a share of 12.9%. In January-August 2024, volumes from Colombia to the EU fell by 52.8% y/y to 5.2 million tonnes.