Colombia’s steam coal exports rose in 2014

OREANDA-NEWS. Colombia's thermal coal exports rose by 1.9pc in 2014, led by increased shipments to Turkey and the UK, but exports fell short of official targets because of a 2 1/2-month suspension at Drummond's Caribbean coal port.

The country's steam coal exports totaled 75.1 mn metric tonnes last year, up from 73.7 mn t in 2013, according to shipping agency Deep Blue. In December, steam coal shipments increased by 3.1pc year on year to 7.3mn t as buyers stocked up for the winter.

The country's total coal exports, including steam, coking coal and metallurgical coke, totaled 77.6mn t last year, 1.5pc higher than the 76.4 mn t exported in 2013. But exports fell short of the 85mn t the government initially expected.

One international coal analyst who forecast Colombian steam coal exports at 75.8 mn t said the suspension of loadings at Puerto Drummond was a major factor in slowing volumes.

Exports were also hampered by global oversupply, which posed a new challenge to the three largest Colombian steam coal mine companies, Cerrejon, Drummond and Glencore.

Argus assessed fob Puerto Bolivar thermal coal prices at \\$64/t on 30 December, down from \\$66.75/t at the end of 2013, which compared with \\$82.25/t at the end of 2012. Declines have accelerated in 2014, with Puerto Bolivar coal falling to \\$58/t last week.

Drummond, Colombia's second largest coal company, increased coal exports by 8.6pc year on year to 21.7mn t despite the port suspension, but fell short of its revised export forecast of 25mn t.

Alabama-based Drummond could not export coal from January 13 until March 31 after the government ordered it to halt loading because it failed to install direct loaders by a 1 January deadline. The company kept producing coal for about 2 1/2 months during the outage and its inventories swelled to around 7mn t, of which 2mn t remains at the port and the mines.

Cerrejon, the country's largest coal exporter, increased coal exports by 2.1pc year on year in 2014, despite cutting production at several pits to ease coal dust concerns.

Cerrejon, which is owned by BHP Billiton, Glencore and Anglo American, exported 34.2mn t of coal last year from its mines in northern Guajira province, up from 33.5mn t in 2012 and 32.8mn t in 2012, the company said. But the company's exports were below the 35mn t the coal analyst had forecast for the company.

Cerrejon's output could have been higher but a lack of rainfall — which led to increased particulate matter from mining operations — forced it to idle several pits.

Prodeco, the country's third largest coal miner, increased exports by 9.5pc year on year to 17.9mn t, Deep Blue said. Its exports came in higher than the 17.6mn t analysts anticipated.

A Goldman Sachs unit, Colombia Natural Resources, was blocked from exporting last year after it failed to install a direct loading system at its port, which also affected the country's total steam coal exports.

Shipments to Turkey jumped by 20.2pc year on year to 7.7mn t as the country found in Colombian coal a substitute for Ukraine's coal, whose supply has been cut by fighting in eastern Ukraine. Turkey also restocked in the late months of last year. Turkey took 876,073 t in December, compared with 689,986t in the same month the prior year. Turkey was Colombia's second top coal trading partner after the Netherlands, whose coal imports plummeted by 23pc to 19.4mnt last year.

Shipments to the UK increased by 13.5pc to 7 mn t last year as utilities stockpiled coal for the winter — and ahead of a planned increase in the UK carbon tax.