By Olivia Kalb

April 6, 2021 - Downside potential for US thermal coal exports remains for 2021 despite recent rises in prices, S&P Global Platts Analytics warned April 5.

The increase in US thermal coal prices, particularly those in the Central Appalachian basin, "is tied to the recovery of CIF Amsterdam-Rotterdam-Antwerp and other Atlantic coal basin prices," which have been pushed up by robust demand in Asia and widespread supply constraints, Platts Analytics said in its US Coal Market Forecast.

However, this support may wane with a resurgence of South African coals moving to India in March, Platts Analytics said. Additionally, strong Panamax and Supramax freight rates will put downward pressure on prices.

In the short term, price movements support the upside potential for US exports to Europe in the second quarter, Platts Analytics said. Although, any significant increase is unlikely given limited restocking in the ARA region despite an increase in coal burn expected.

While ARA ports touched a five-year low of approximately 3.4 million mt in March, Platts Analytics does not expect a rush to restock given currently high FOB prices and freights rates, the International Thermal Coal Forecast said.

"Another factor to consider is the movement of the US dollar against local importing currencies, which had been declining through the period to the end of 2020 and now is fluctuating with some periods of strengthening," the report said.

The report noted the sharp depreciation of the Turkish lira against the US dollar in March and warned of the downside risk for US exports this year in a number of markets.

Further depression the forecast, there are early indications of a recovery in Colombian coal, limiting opportunities for US exporters in Latin America.

Currently, US thermal exports are projected to about 25 million mt in 2021, flat year on year, the international forecast said.