South Korea coal imports could become more unpredictable if the country’s latest plans to combat air pollution take hold, says a top regional analyst.

Its government recently announced that it will suspend the operation of coal-powered plants over the winter to reduce fine dust emissions.

Eight to 15 coal power plants will suspend operations until February 2020, according to the Ministry of Trade, Industry and Energy.

“If this policy of shutting down coal-fired power plants in winter and more generally shutting down polluting industries in winter, including steel mills becomes a regular policy, than we are likely to see more of this seasonality patterns in coal imports,” said Ralph Leszczynski, Banchero Costa’s head of research in Singapore.

He forecasts that the dry bulk market could see “very poor coal import volumes” in the first quarter of 2020 and then a “strong rebound” in the summer months.

South Korea’s coal imports last winter were described as “very disappointing” according to Leszczynski due to the combination of a weakened economy and the crackdown on air pollution.

The country suffered a contraction in growth in the first quarter of this year, no doubt influenced by recent trade conflicts in particular the one between itself and Japan.

South Korean coal imports in the first six months of 2019, were down almost 5% year-on-year to 59.4 million tonnes.

However, things turned around quite sharply in the second half of the year, with volumes up 8.8% between July and October to 46 million tonnes.

“Based on ship-tracking data, they also imported at least 11.3 million tonnes in November, which would again be up 16% compared to November 2018,” said Leszczynski.

“I have to underline that this is unusual, as in previous years there were no clear seasonality trends/patterns and imports were quite steady throughout the year,” he added.

One sector that could be set to benefit from the decline in coal imports is the LNG sector, which is seen as a less polluting than coal.

Meanwhile, the availability of LNG on the export market has increased strongly this year thanks to new export projects starting up in Australia and the US.

“Unfortunately, we have not seen this much in the first half of 2019, when LNG imports to Korea were weak even when coal imports declined,” said Leszczynski.

“This indicates that it was the weak Korean economy in general which was more to blame for the weak coal demand than the actual pollution crackdown earlier this year.”