But while American coal has gained ground in Asia, it only represented below 4% of the booming region’s imports in 2012 and less than 1% of total coal consumed by the four large Asian importers, according to the EIA’s Today in Energy report.
Increasing Asia-bound U.S. exports contributed to a record monthly total for March, accounting for more 50% of growth over the 2012 exports that month.
Since 2007, according to analysts, structural and cyclical forces have boosted demand from Asia. Important players of America’s supply chain—producers and railways alike—increased Asian sales from increased demand, strong export prices, and lower U.S. coal consumption.
Further occasional factors such as supply disruptions in other coal-exporting countries have also provided a temporary boost to American exports. U.S. coking coal exports to mainland China in Q1 2013 for instance were twice their 2012 level—primarily from enhanced met coal demand from China shadowed by reduced supplies in Mongolia over contract disputes.
Exports to China and South Korea, meanwhile, have accelerated particularly fast, according to EIA data, though India’s and Japan’s have increased, too. Met coal accounted for 75% of the growth since 2007, the report added; thermal coal represented the remaining 25%. Although coking coal export growth was more evenly distributed among the four countries, top thermal coal export demand came primarily from China and South Korea.
The EIA statistics also indicated that met coals were mainly shipped through East Coast and Gulf of Mexico ports, while thermal coal exports mainly departed from West Coast ports and the Gulf of Mexico. In recent years, thermal coal exports have been departing via the Pacific Northwest—a departure point for Powder River Basin coal, mostly bound for South Korea.
Despite recent growth, however, U.S. coal remains a relatively small source for Asian markets. EIA researchers, moreover, note that American coal faces stiff competition from other suppliers—particularly Indonesia, Australia, South Africa and Russia in the thermal coal and Australia, Canada and Russia in coking coal. Since 2011, Mongolia has also become a major player in metallurgical coal exports to China, bringing further competition.
