European thermal coal imports dropped to record lows in March, provisional DBX data showed on Thursday, as poor generation margins exacerbated a seasonal decline in demand.
Seven key importers – including the Netherlands, Belgium, Germany, France, Italy and the UK – imported around 1.1m tonnes, which was down from 1.2m tonnes in February and the lowest since the dry bulk data provider’s history began in 2015.
Of the total, the Netherlands imported over half, or 0.71m tonnes, while Spain and Italy each took just under 0.1m tonnes, showed the data, which is subject to change as the figures are finalised over the course of the month.
“Very weak dark spreads, a very mild weather and a reduced number of operating coal-fired power plants kept seaborne coal deliveries to Europe near all-time lows in March,” DBX said in a note.
The May German clean dark spread – the profit margin for burning coal to produce power – was seen last at just EUR -32/MWh for plants with an average efficiency of 42%, while the equivalent margin for gas units stood at around EUR -12/MWh, Montel calculations showed.
As such, Europe’s thermal coal imports were expected to be even lower, DBX added. The coal was primarily shipped from Colombia (0.47m tonnes), the US (0.37m tonnes) and South Africa (0.1m tonnes).
“However, the accident at the port of Baltimore, which has resulted in the shutdown of coal export flows, is expected to decrease the share of US coal imports for Europe,” DBX said.
Export disruptions from the second-largest coal port in the US – following the collapse late last month of a bridge over the main waterway serving the port – would cost the global market around 75,000t/day of supply, but the Pacific basin would be more affected than the European market, Montel reported.
In European coal trading, the API 2 front month was last seen down USD 1.45 on the day at USD 114/t on Ice Futures.
By Laurence Walker
