The Global Coal Commodity Trade Continues to Show Signs of Stability and Growth, With India Commanding Significantly High Premiums at Auction, and Russia Closing in on a Stronger Position Within the Industry.
As thermal coal remains the single most widely used source for generating electricity across the globe, the industry as a whole is on a solid trajectory for continued momentum and growth – expected to hit 1.015 billion mt in 2020 alone. The seaborne coal trade alone is expected to deliver 1 billion mt mark by the close of this year.
While a macro view of the industry is definitively health, consumption needs and usage across different geographies of the globe can vary distinctively – and impact the trade paradigm that drives the global production and movement of coal around the world. While consumption across Asia may have dropped over the past year, there are significant indicators that territories that dominate coal production, such as India and Russia, are positioned for a very healthy future relative to their production and exporting of coal as a commodity.
Most recently, within India – the fourth largest producer of coal in the world – Coal India’s commodity was able to command upwards of 62% above price value for their coal available through auction – and the company has plans to expand their auction inventory in the short term given the viability of the auction channel.
India isn’t the only country benefitting from shifts in the coal trade dynamics. Russia is well on its way to securing its spot as the largest exporter of coal. In the first 9 months of 2019 alone, Russia’s total coal export rate increased over 7% globally – with Russia’s direct exports to Asia-specific countries growing over 14% over the past year. The Russian export business to China specifically has grown a staggering 27% compared to 2018.
As the Southeast Asian region continues to experience stagnation in their thermal coal production, Russia is expected to overtake Indonesia as the largest export of coal over the next two decades, and presents a very tangible trajectory for overpowering India and Indonesia within the industry.
One of the leading players in the Russian coal sector is Sibanthracite Group – owned by Dmitry Bosov, who is also Alltech Group’s Chairman of the Board of Directors. The group is ranked first in the production and export of UHG anthracite throughout the world, and is the largest producer of metallurgical coal at the domestic level. Sibanthracite Group is one of the most dynamically developing coal companies in Russia. In 2018, it produced 24.1 million tonnes of coal and anthracite.