S. Korea's June coal imports hit five-month high on utility stockpiling

By Romel S. Gurky

South Korea's coal imports rose to a five-month high in June and reached their highest level for the month in four years, driven by pre-summer stockpiling by power utilities and stronger purchases from Australia and Russia, according to Korea Customs Service data cited by sxcoal.com.

Coal imports totaled 10.13 million tonnes in June, up 32.0% from 7.67 million tonnes a year earlier and 22.0% higher than 8.30 million tonnes in May.

Australian and Russian coal accounted for more than 60% of total imports during the month.

The surge was driven by multiple factors, including pre-summer stockpiling by power utilities to ensure stable supply ahead of the peak demand season.

South Korea's operational power generation capacity stood at 93 GW in June, up 10.26% from the previous month but down 6.66% year on year, according to Korea Electric Power Corp data. Peak power demand reached 82.2 GW, down 3.98% year on year but up 7.26% month on month. Coal-fired power capacity was flat at 40.8 GW, while combined solar, wind and hydro capacity rose 287 MW from a month earlier.

In the first half of the year, South Korea's total coal imports reached 57.04 million tonnes, up 21.55% year on year. Coal remained the cheapest energy source for South Korea, as international LNG prices have risen sharply since the US-Iran conflict.

This has strengthened the economic incentive for gas-to-coal switching this year. Meanwhile, lower nuclear availability has boosted coal-fired power generation as a key alternative.

Imported coal has been meeting the power sector's demand, but arrivals have been outpacing actual consumption growth. Once stockpiling slows, overall arrivals are expected to decline.

While June imports were strong, the room for coal to replace nuclear power is narrowing. If nuclear recovery continues to be delayed during the peak summer season, demand for LNG for peak-shaving may rebound.

Coal import value in June stood at $1.39 billion, up 62.39% year on year and up 26.78% month on month, implying an average import price of $136.76/t, up 23.05% year on year and up 3.91% month on month.

In January-June, cumulative import value reached $7.05 billion, up 23.86% year on year, implying an average price of $123.6/t, up 1.9% year on year.

By coal type, June thermal coal (other bituminous and other coal) imports totaled 6.92 million tonnes, up 39.21% year on year and up 23.77% month on month, accounting for 68.29% of total imports, up from 67.31% in May. Coking coal (other coking coal and hard coking coal) imports stood at 2.26 million tonnes, up 19.88% year on year and up 32.1% month on month, accounting for 22.32% of the total.

PCI coal imports were 535,500 tonnes in June, up 5.63% year on year but down 32.59% month on month, accounting for 5.29% of the total. Anthracite imports totaled 415,700 tonnes, up 32.57% year on year and doubling month on month.

Editing by Reiner Simanjuntak