South Korea’s imposition of a strict sulphur cap on its imported coal is likely to cause ripples across Asia’s markets for the polluting fuel, both in the short and longer terms.
From July, South Korean utilities will be restricted to burning coal with an average sulphur content of 0.4 percent over the course of the year, part of government measures to combat air pollution. Such a low sulphur limit effectively knocks out much of the thermal coal from Australia, which generally produces coal with a high energy value, but also higher sulphur content than rivals such as Indonesia, Russia and South Africa.
Australia is the second-largest supplier of coal to South Korea, behind Indonesia, and has already been losing market share so far this year.
Vessel-tracking and port data compiled by Thomson Reuters Supply Chain and Commodity Forecasts show a total of 17.4 million tonnes of Australian coal being discharged in South Korea in the first five months of this year, down 7.4 percent from the same period in 2017. Read More