While the US-China trade friction of the past few months has, undoubtedly, hurt shipping in more ways than one (dry bulk shipping not excluded), it seems that some good can also be made of it, especially if a sustainable agreement can be reached. This could involve the rise of US exports of commodities to China, from soyabeans and LNG, but most importantly coal.
In a recent note, shipbroker Banchero Costa said that “with increasing investment in renewable energy, the United States continues to steadily phase-out its aging coal-fired power plants. In 2018, the US retired 12.9 GW of coal-fired capacity. According to some industry projections, further 6 GW of coal-fired capacity will be retired in 2019, and 5 GW in 2020. With domestic demand in decline, US coal producers are becoming increasingly reliant on the export market. Whilst in 2006 only 4 percent of US coal production was exported, the ratio went up to a record 15 percent in 2018. In 2018, the United States exported 105 mln tonnes of coal, which was 19.3 percent up year-on-year, and the second highest annual total ever (second only to the 114.2 mln tonnes recorded in 2012). And this year started extremely well as well, with a record 10.8 mln tonnes loaded in March 2019, up from 7.3 mln tonnes in March 2018, according to Refinitiv data.
Of the 105 mln tonnes exported in 2018, 55.8 mln tonnes was coking coal (up 11.3 percent year-on-year) whilst 49.1 mln tonnes was thermal coal (up 29.8 percent year-on-year)”.