Exports of US thermal coal rose 21.1pc in January–June driven by a sharp increase in deliveries to India, US census data show.

The US shipped 6.2mn t to India during the first half of this year, up 52.5pc on the year. Most of the volume is likely to be NAR 6,900kcal/kg North Appalachian coal destined for the cement and brick kiln industries, market participants commented.

In June the US shipped 836,000t to India, up 12.3pc on the year. All of this volume was shipped out of Baltimore, Maryland.

US 6.5pc sulphur petroleum coke remains the most competitive product into India, but the landed cost for petroleum coke increased from around $3.40/mn Btu to $3.70/mn Btu on the month in July, according to Argus calculations. And pet coke prices have continued to rise in August, which could support coal from industrial users in the near term.

Some North Appalachian coal is currently being barged to the port of New Orleans for export to industrial users in India because the Baltimore and Hampton Roads ports on the US east coast are operating at full capacity, a Mississippi River barging company told Argus.

German and French demand support US export growth to Europe

US exports to Europe increased by 9pc during the first half of the year to 5.7mn t, driven by higher flows to Germany. Exports to the Netherlands edged higher by 2.4pc to 2.6mn t in January–July, while exports to Germany rose by 9.1pc to 1.2mn t.

But exports to other European destinations have generally fallen over the first half of the year, with flows to Poland falling by 21.3pc to 227,000t and exports to the UK plunging by 74.5pc to 197,000t. Polish spot demand is currently focused on sized coal — a market predominantly supplied by Colombian or Kazakh coal — which could limit opportunities for fresh US sales to Poland in the short term.

Exports to France bucked the trend, rising to 254,000t over the same period from nothing a year earlier. Ship-tracking data show 110,000t of US thermal coal arrived at Montoir from Newport News on 9 January, likely destined for the EDF-operated 1.2GW Cordemais hard-coal power plant.

US high-sulphur Illinois Basin coal has been the most competitive product into the cif Amsterdam-Rotterdam-Antwerp (ARA) market since mid-January when European buying interest for high sulphur products faded, analysis of Argus net forward prices show. European utilities blended Illinois Basina and North Appalachian coal with low-sulphur Russian coal still on stock after the 10 August embargo last year, but they are no longer able to do so, a Europe-based trader said.

The landed cost of high sulphur Illinois Basin coal into ARA was $93.38/t on 4 August. This compares with $115.93/t for low sulphur high calorific value coal from the Central Appalachian region.

US exports to the Asia-Pacific show signs of weakness

US exports through ports in the US and Westshore in Vancouver to key Asia-Pacific markets of Japan, South Korea, Hong Kong, Taiwan and Chile fell by a combined 6.3pc to 9.5mn t over the first half of this year, US census and ship-tracking data compiled by Argus show.

The decline was driven by a 33.8pc fall in exports to South Korea. The country took 905,000t from US ports, up 47.7pc on the year, US census data show, and 2mn t from Westshore, down by 46.6pc on the year.

Thermal coal departing from Westshore ranges between NAR 4,800–5,500 kcal/kg depending on the mine origin, market participants said. Some of this coal will originate from Alberta, Canada but the bulk will be lower calorific value coal between NAR 4,800–5,300 kcal/kg coal from Montana in the US. Metallurgical coal typically departs from the Neptune Bulk Terminal in North Vancouver which is partly owned by Canadian producer Teck.

Exports to Japan, the largest market for Western US coal, fell by 2.7pc to 4.3mn t from all ports including Westshore, and by 7.5pc to 3mn t from Westshore solely. San Franciscan ports continue the hold the largest share of US exports to Japan, sending 5.94mn t in January–June, down from 6.3mn t this year. This is likely to be Utah coal with a calorific value of NAR 6,200-6,300 kcal/kg and a sulphur content of 0.5pc, exported from the Richmond and Stockton terminals.

Some western US coal is also shipped to Japan from Guaymas, Mexico, but volumes to this port are “dropping off” a railroad said, because it is difficult to pass through the Nogales border gateway.

Operational problems along the railroad leading to Westshore has harmed export capacity this year, a Montana producer said.

Westshore coal exports in July rose by 19pc on the year to to 443,000t, and by 6pc to 751,000t to South Korea.

Net forward prices to NW Europe (basis 6,000 kcal/kg) $/t

Net forward prices to NW Europe (basis 6,000 kcal/kg) $/t

Exports through US ports mn t

India net forwards (NAR 6,000kcal/kg basis) $/mn btu

India net forwards (NAR 6,000kcal/kg basis) $/mn btu