U.S. coal exports to the top four destinations experienced double-digit drops in shipments in the second quarter of 2020 compared to the first quarter of the year. The drop is one indication of how the international market has contracted in response to the coronavirus pandemic.

Exports in the second quarter totaled 13.5 million tonnes, a 26.1% decline from 18.3 million tonnes shipped in the previous quarter and a 41.7% drop from 23.2 million tonnes transported in the year-ago period, according to data compiled by S&P Global Market Intelligence. Of the top 20 export destinations, nine saw double-digit percentage declines quarter over quarter and 15 underwent similar drops in coal shipments year over year.

The top four destinations — South Korea, India, Brazil and Japan — all saw declines in U.S. coal shipments greater than 20% moving to the second quarter from the first three months of the year. Exports to Canada in the second quarter totaled 1.0 million tonnes, more than doubling quarter over quarter but 37% less year over year.

Perhaps the most pronounced falling off was in exports to India, with shipments decreasing 62.3% quarter over quarter and 50.6% year over year to 1.6 million tonnes in the second quarter. India's significant reduction in coal imports occurred in tandem with the Indian government mandating at least 100 million tonnes of imported coal be replaced with domestically produced products, Business Standard (India) reported July 6.

U.S. producers exported 1.2 million tonnes of coal to Japan in the second quarter, 57.6% less than the prior-year period. The country announced plans in July to close roughly 100 coal-fired power assets by 2030 in order to meet its emissions reductions targets under the Paris Agreement on climate change.

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Idled steel production throughout Europe and the Asia Pacific region "greatly impacted" metallurgical coal demand while thermal coal imports fell off in the second quarter due to "slower economic activity" among large destinations, Peabody Energy Corp. President and CEO Glenn Kellow said on an Aug. 5 earnings call. Noting an example, Kellow said India's coal imports through June dropped a total of 20 million tons from the previous year's six-month period.

Consol Energy Inc. began the year intending to ship between 9 million and 10 million tons abroad and was on pace to meet that goal at the end of the first quarter, President and CEO James Brock said on an Aug. 10 earnings call. The company only shipped about 800,000 tons in the second quarter amid a worldwide decline in electricity demand and steel production.

"This was entirely caused by the worldwide economic shutdown created by the COVID-19 pandemic. It is important to note that these tons were not replaced by other tons or other fuels. They were lost due to unprecedented demand destruction," Brock said.

Projecting optimism, Brock said that global demand was starting to recover and demand in India was returning after a monsoon season, helping to maintain demand for Consol's products. "We have started receiving inquiries again and we expect a steady recovery for the remainder of the year," he said.