Slump Markets in Asia: Coal Trade Declines for the First Time in 21 Years
In India, efforts are underway to substantially increase domestic coal production over the next few years and to complete three major rail transportation projects for facilitating increased shipments of coal from major producing regions in northeastern India to demand centers in other parts of the country. Although India's coal producers have already increased domestic production in 2014 and through the first few months of 2015, the first of India's three major coal railway projects, the Jharsuguda-Barpali railway link, is not scheduled to be completed until approximately 2017.
Increases in exports from Indonesia and Australia met most of the expansion in international coal trade between 2008 and 2013. Indonesia's exports increased by 247 million short tons, accounting for 56% of world coal export growth. Australia's exports increased by 106 million short tons, accounting for an additional 24% of the global increase. Additional exports from Eurasia (49 million short tons) and the United States (36 million short tons) accounted for almost all of the remaining increase in coal exports during this period.
Production Costs Affect US Coal exports
Lack of growth in global demand for coal imports in 2014 and 2015 has led to significant declines in coal export sales from Indonesia and the United States. Export sales from other countries/regions, including Australia, Eurasia, southern Africa, and South America, are on track to be near or slightly higher in 2015 compared with 2013.
U.S. coal exports are down primarily because of their higher production costs relative to other coal exporting countries. The decline in Indonesian exports is attributed primarily to China's reduced demand for imported coal accompanied by reduced demand in both China and India for Indonesia's lower-quality export coals.