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The prevailing market view on coal is that the industry is now facing terminal decline, as renewables and natural gas displace the polluting fuel. The problem is the facts don't quite fit the narrative.
The coal industry can be split into two broad sectors, namely coal mined and burnt domestically, and the seaborne market, where coal is mined and exported to countries that need to import energy.
Of these two, the seaborne market grabs the most attention, as it's more visible to investors, traders and even environmentalists opposed to coal mining.
Recent media headlines on the seaborne market are largely bearish, with one of the latest being an interview of Guillermo Fonseca, the chief executive of Colombian coal exporter Cerrejon, who told Bloomberg News that the market for the fuel "is disappearing."
Add to this pessimistic assessment the sale by mining major Rio Tinto of its thermal coal assets, plans by rival BHP Group to do the same and a commitment by another big miner, Glencore, to cap production and the picture emerges of an industry on the brink.
And that's just the supply situation for the seaborne market. On the demand side of the equation, Europe is shutting coal-fired power and Asia is starting to look like it may not be the last refuge for coal growth that it was long assumed to be.
It's therefore a bit of a surprise to look at the actual volume of coal being shipped around the globe and see that it is growing so far this year.
In the first seven months of the year a total of 870.8 million tonnes of coal, including both thermal and coking grades, were imported from the seaborne market, according to vessel-tracking and port data compiled by Refinitiv.
That's 2.1% higher than the 852.6 million tonnes in the same period last year, and while not a massive increase, the fact that the seaborne market is stronger at all in 2019 does challenge the narrative of a dying industry.
Unsurprisingly Asia was the main center of demand growth, with imports of 557.6 million tonnes in the first seven months, up 4.5% from the same period last year.
This was mainly driven by China and India, with the former showing 7% growth in imports in the first seven months, and the latter 9%.
More established consumers such as Japan and South Korea both showed declines, part of a trend where growth is being concentrated in developing markets.
Global growth
But it wasn't just Asia showing growth in seaborne coal imports, with Europe gaining to 101.6 million tonnes from 94.3 million tonnes, Latin America up to 30.3 million tonnes from 28.1 million tonnes and Africa going to 16.4 million tonnes from 15.5 million tonnes.
What this shows is that the seaborne coal market has actually enjoyed broad-based growth so far in 2019.
Of course, the fact of a relatively strong performance in the first seven months doesn't necessarily alter the outlook for longer-term decline.
Given that much of seaborne coal's growth will depend on what happens in China and India, it's bearish that both these countries are taking steps to limit future imports.
China has this year slowed down customs approvals for cargoes amid a message from the authorities that coal imports should not grow from last year's levels.
India maintains a policy of eventually moving to zero imports, which is probably unrealistic, especially for coking coal given the country has limited production of the coal used in steel-making.
However, it's reasonable to expect that over time India's state producer Coal India will be able to boost both output and distribution, which may lessen dependency on coal imports.
The overall picture for seaborne coal does remain gloomy, but as the growth in the market so far this year shows, coal remains sticky in the global energy system and any death may be lingering.
(Writing by Jessie Jia Editing by Harry Huo)
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