Global coal trade by sea increased by 3.7% in 2018

Global trade in coal by sea rose 3.7% last year thanks to higher production in India, Indonesia and Russia, the German lobby of VDKI coal importers said on Friday.

Imports and exports reached 1.202 billion tonnes, up from 1.159 billion tonnes in 2017, VDKI chief executive Franz-Josef Wodopia said in a speech made available to Reuters.

Of the total, trade in steam coal used in power plants increased 3.6 percent to 920 million tonnes.

Trade in coking coal used for steelmaking rose 4.4 percent to 281 million tonnes, estimated the VDKI (Verein der Kohlenimporteure).

Global demand was driven by India, where the start of new power plants pushed imports to over 200 million tonnes, delivered largely from Australia and Indonesia.

China and Southeast Asia were other demand centers, served by Australia and Indonesia but also by South Africa, Russia, the United States and Colombia.

China, the world’s largest producer, is currently restricting additional imports to serve its electricity sector. It is not yet clear how soon those import limits will be relaxed, Wodopia said.

The size of China’s domestic coal production determines how much coal the country must import, which has an impact on the global trade balance.

Wodopia noted that China’s energy mix is ​​expected to include at least 10% gas by 2020, which it says could restrict its imports as well.

But also, this policy could stimulate shipments of liquefied natural gas (LNG) to China.

“The long-term price forecast is therefore: rather weak coal, firm gas,” he said.

(Reporting by Vera Eckert; editing by Jason Neely)

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