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Global coal trade in 2024 is expected to rise modestly, largely driven by strong demand from Asia

Global coal trade in 2024 is expected to rise modestly, largely driven by strong demand from Asia, according to the mid-year Coal trade update by IEA. China has seen significant import growth despite ample stockpiles, but this trend is anticipated to slow down until the end of the year due to increased domestic production and hydropower recovery. India has extended its coal blending mandate, ensuring continued high import levels. Conversely, Japan, South Korea, and Taiwan are reducing imports. Vietnam, which recorded remarkable growth in imports in 2023, is set to surpass Taiwan as the fifth largest coal importer in 2024. Its growing demand for coal is primarily driven by developments in the power sector. Indonesia is poised to be the primary beneficiary of increased Asian demand, with its coal exports expected to grow by 3%. Meanwhile, Russia still faces challenges due to Western sanctions, production issues, and export duties, leading to a projected 16 million ton decline in exports for 2024. Australia's coal exports are expected to grow modestly, while Mongolia is emerging as a significant coal exporter. In the meantime, China's finished steel exports have declined for the second consecutive month in July, signalling a potential slowdown in the sector. While overall exports for the first seven months of 2024 remain higher than the previous year, the downward trend is attributed to weakening global demand and increased trade barriers. Domestically, the steel industry faces challenges from sluggish construction and manufacturing sectors, particularly impacting flat steel products like cold-rolled coil. Market participants anticipate a difficult second half of the year as both domestic and export markets soften, with steelmakers facing pressure from declining prices and shrinking profit margins.

Moving from dry to wet, Russia's crude oil exports have declined significantly in July. Despite a marginal increase in the share of non-G7 tankers involved in the transportation, the overall volume of oil shipped by these vessels has dropped by over 10%. This decline is attributed to a combination of factors, including increased Western sanctions targeting tankers, Russia's voluntary production cuts in line with OPEC+ agreements, and a recovery in domestic refining. While the sanctions on tankers have initially disrupted operations, the resilience of the global oil market, coupled with the willingness of major buyers like India and China to continue purchasing Russian crude, suggests that these disruptions may be temporary. Hong Kong and mainland Chinese shipping companies have emerged as dominant players in the transportation of Russian oil, with their combined share reaching nearly 29% of total exports. However, even with these developments, Russia's overall crude exports have contracted, indicating the growing pressure exerted by Western sanctions. Finally, some very positive news concerning seaborne trade is coming from America where the Panama Canal is making a strong recovery from a drought-induced bottleneck. The Panama Canal Authority (ACP) is steadily restoring normal operations, increasing daily transits and relaxing draft restrictions for larger vessels. This is welcome news for shippers, particularly those in the grain sector who stand to benefit from the upcoming US harvest. While the canal's short-term outlook is positive, the ACP is also taking a long-term perspective, investing heavily in water infrastructure to ensure the canal's continued reliability in the face of climate change. This proactive approach is crucial for maintaining the canal's status as a vital global trade artery.

Sale and Purchase

Dry:

On the Post-Panamax sector, the "Navios Apollon I" - 87K/2005 IHI was sold for USD 13 mills, while the one year older "Corona Kingdom" - 88K/2004 Imabari was sold for mid/high USD 11 mills to Chinese buyers. On the Panamax sector, the "Wu Zhou 6"- 76K/2013 Hudong- Zhonghua found new owners for USD 18.5 mills, whilst the "Seacon 9" - 75K/2012 Zhejiang Zengzhou was sold for USD 14.71 mills via auction. The modern Ultramax "Great Spring"- 61K/2017 Dacks was sold at auction for USD 27.8 mills. Last but not least, 2x Handysize resales, the "Rostrum Dubai" - 40K/2025 Jiangsu and the "Sea Wave" - 40K/2025 Jiangsu Dajin were sold for USD 64 mills enbloc to Chinese buyers.

Wet:

On the tanker market, we have to report only 2 sales, both on the VLCC sector. The "Apollo Harmony" - 302K/2010 IHI was sold for USD 58 mills to Greek buyers, while the "PNS Serena" - 300K/2006 Universal changed hands for excess USD 40 mills.

Xclusiv Shipbrokers Inc.