Supply narrowing global power coal market will hit bottom in 2019

On October 18, Perret associates, a coal industry consultant, said in its long-term forecast that although coal supply may be tightened from the end of this year to 2020 to achieve a global supply-demand balance again, the global power coal market has largely bottomed out after a sharp decline in the first half of 2019. The demand of some Asia Pacific countries including Vietnam and India continued to grow as the demand in the Mediterranean and Atlantic regions declined. Overall, despite increased demand in some Asian countries, the global supply of surplus power coal is still around 19 million tons, according to Perrett. In May this year, Perrault estimated that the global surplus supply of power coal was 24 million tons.

The decline in excess supply confirms our forecast since March April 2019 that the global power coal market will gradually return to balance again this year. Perrault said it expects the export of us power coal to decline to 33 million tons in 2019 and only 20 million tons in 2020. According to the standard & Poor's analysis and the data of the National Bureau of statistics, in 2018, the export volume of U.S. power coal was 49.1 million tons. According to Perrault, Colombia's export of power coal is expected to be 75 million tons in 2019, a decrease of 4.5 million tons compared with 2018. In terms of demand, in 2019, the power coal import volume of EU countries is expected to drop to 72.3 million tons, 25% lower than that in 2018. According to Perrett, in 2019, power coal imports from the Atlantic and Mediterranean regions are expected to decline to 130.2 million tons, 24 million tons less than in 2018 and 125 million tons in 2020. In the Asia Pacific region, although the growth rate of China's coal-fired power generation in 2019 is far lower than last year, China's power coal import is still expected to be better than expected. In the first half of this year, China's import of power coal is expected to be 223.9 million tons, which is equivalent to the level of 2012-2014, according to Perrault. According to S & P's data, China imported 217 million tons of power coal in 2018.

The increase in China's import of power coal is mainly due to the relatively strong demand of the country's heavy industry, while the industrial inventory dropped significantly in the first quarter of 2019, so the demand for replenishment of the industry increased. " Perrett said. In 2019, Vietnam's import of power coal is expected to increase to 38 million tons, more than double the previous year, the company said. In its October forecast, the company said Vietnam's total coal imports are expected to reach 43.1 million tons in 2019, far higher than 23 million tons in 2018. According to Perrett, India's import of power coal is expected to reach a record high of 860 million tons in 2019, an increase of 21.7 million tons over 2018. In 2010, India imported only 556.4 million tons of power coal.