The thermal coal story in Asia just keeps looking better. With another data point last week suggesting that supply continues to tighten.
Vietnam became the latest country to say it is seeking coal imports. Officials stated they are trying to secure about 10 million tonnes of thermal coal yearly--starting in 2017.
That's of course a little ways out. But it appears even now Vietnam's changing supply-demand dynamics are beginning to impact the regional market.
Traditionally, Vietnam has been a coal exporter. But those shipments have been on the decline of late. With 2013 exports totalling just 12.8 million tonnes--down almost 16% from 2012 levels.
This comes as the country's domestic production has been falling. And in-country coal demand is rising, due to construction of new power facilities.
It thus seems that officials are looking at a complete flip in terms of their import-export picture over the next few years. With exports ceasing nearly completely, and imports becoming prominent.
The country won't be a massive consumer. But 10 million tonnes annually is a significant amount for the Asian market. That's going to turn the screw one more time when it comes to ever-tightening supply. Making it a little tougher for giant buyers like India, China and Japan to source imports.
This is an investment scenario that just keeps seeing bullish news. While prices and stocks remain (for the moment) at low levels.
That combination should be intriguing to value-seeking investors.
Here's to joining the club,
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Dave Forest
