While Brazil took the lead in U.S. exports of coking coal at more than 5 million tonnes over the first eight months of the year, exports to India surged to 4.1 million tonnes between January to August.

This was almost double the quantity of the year-ago period, according to U.S. Census Bureau data. India has also stepped up purchases of U.S. thermal coal.

India is on a drive to triple its steel output by 2030, via integrated steelmaking plants, and a government-led policy has stressed the need to expand and diversify its coking coal supply.

Steel demand in India is expected to track GDP at 7%-plus annual growth rates, as public spending on infrastructure and affordable housing supports demand for steel, Citi's Asia commodities strategist Tracy Liao said in a report.

"All new capacity additions are Basic Oxygen Furnace capacities which should lead to strong demand for coking coal imports in the medium term," the report published in August said.

The Netherlands, home to Tata Steel Ijmuiden BV and ports serving steel plants in Germany and the Benelux region, saw U.S. export coking coal volumes spike. The exports rose to 3.9 million tonnes over January-August, from nearly 2.0 million tonnes in the year-ago period.

Europe and Turkey was the destination for 17 million tonnes of U.S. coking coal exports over January-August, up 20% on the year-earlier period.

Japan on the rise

Japan took on over half a million tons more U.S. coking coal over January-August, at 3.6 million tonnes, than in the year-ago period.

Much of the increased quantity to Japan was supplied through Baltimore, used to ship mainly Northern Appalachian met coal such as low-vol, mid-vol, high-vol A and crossover higher-sulfur met coals.

On a fiscal year basis — often used for accounting and contract periods in Japan and other nations — April-to-August U.S. shipments to Japan were steady year on year at nearly 2.0 million tonnes.

U.S. low-vol HCC prices have sat in a $170-$200/tonne FOB range so far in 2018, while prices in 2017 were volatile, spiking above $200/tonne in April and falling to average at around $145/tonne in June.

Seaborne demand for U.S. thermal coal has also picked up considerably this year. Higher thermal coal prices fueling U.S. exports have added to congestion at ports.

Through August, U.S. bituminous coal exports totaled 27 million tonnes, up 41% year on year. The volumes annualize at 40.6 million tonnes, which would be the highest total since U.S. bituminous coal exports peaked in 2012.

The increase in thermal exports has been driven primarily by Asia, and specifically India, which has increased U.S. imports to replace high-sulfur petcoke.

The Indian government has been working to restrict petcoke consumption within the country to reduce air pollution.

Over January-August, India imported 6.9 million tonnes of U.S. bituminous coal, up 109% year on year. Of that amount, 4.7 million tonnes, or 68%, went through Baltimore.

Terminals in Baltimore and Hampton Roads, Va., which use the same shipping channel, have seen added congestion as railroads work to bring in coal to meet additional demand in Asia and Europe. Buyers needing different coking coals on the same vessel have found multiple loadings more difficult to program with suppliers, sources said.

India and New Orleans

Another 29%, or 2.0 million tonnes, for India came through the U.S. Census district of New Orleans, the primary exit port for Illinois Basin coal.

Both Northern Appalachia and Illinois Basin coal are relatively high-sulfur coals, at roughly 2-3%, while Central Appalachian coal is typically 1% sulfur. U.S. high-sulfur petcoke, FOB U.S. Gulf Coast, is typically 6.5%.

U.S. fuel-grade petcoke exports to India fell 54% over January-August to 2 million tonnes, from 4.2 million tonnes during the same period last year.

U.S. bituminous coal exports from the U.S. Census district of Norfolk, which encompasses three terminals in the Hampton Roads region, rose nearly 48% to 3.7 million tonnes in the period.

Japan and South Korea have also increased their imports of U.S. bituminous coal this year, with exports to those nations up 74% and 38%, respectively.

Japan accounted for 2.4 million tonnes of exports through the first eight months of the year, primarily through ports on the U.S. West Coast, while South Korea accounted for 1.5 million tonnes, mainly through Westshore Terminals in Vancouver.

U.S. bituminous coal exports to Europe have been roughly flat this year, totaling 7.9 million tonnes.

"While European coal burn will decline over time, Asian [thermal coal] demand is still increasing, and it's helping lift European interest in U.S. coals to help back-fill their needs," Seaport Global analyst Mark Levin said in a note Oct. 9.

Hector Forester is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.