Indian ships return for Queensland coking coal

Market: Coal, Coking coal
16/09/20

Indian shippers are returning to Queensland coal ports in greater numbers, according to shipping lists for the second half of September, after six months of below average coal shipments from Australia.

The adjacent ports of Hay Point and Dalrymple Bay Coal Terminal (DBCT) each have many more ships destined for India arriving over the next fortnight than they have since April, according to shipping lists. This could bolster shipments from the key coking coal ports, after a lacklustre few months with below average ship queues.

There are just 15 ships waiting outside DBCT and Hay Point today, down from an average of 22 and a high of 55 in March. DBCT is tracking 17pc and Hay Point 5pc behind its 2019 figures for January-August, according to port data. The first half of September looks in line with the low shipments reported in July and August, according to early shipping data. This is making an increase in demand for Queensland hard coking coal from India most welcome by the state's mining firms, particularly if it is accompanied by continued rising prices.

Argus last assessed the premium hard mid-vol coking coal price at $119.15/t fob Australia yesterday, up from a recent low of $105/t on 11 August but down from $163/t in mid-March. It assessed the hard mid-vol coking coal price at $96.15/t fob Australia on 15 September, up from $85.30/t on 28 August but down from $144/t on 16 March.

India took just 13.85mn t of Australian hard coking coal in January-July 2020, which is 30pc less than in the same period last year, according to Australian bureau of statistics data. India took less than 20pc of Australia's hard coking coal exports for May-July, which it had not done since 2006.

Several Indian steelmaking blast furnaces were closed as part of the Covid-19 lockdowns, but many are returning to production to avoid operating issues associated with prolonged closures, according to Swiss bank UBS.

An uptick in Indian demand, such as that implied in the latest shipping lists, would be particularly beneficial for shippers through the 85mn t/yr multi-user DBCT port.

DBCT has a target to ship at an annualised rate of 75.56mn t/yr in September, but had only shipped at a rate of 55.3mn t/yr in the first half of the month. It missed its August target of 80.57mn t/yr by around 35pc, shipping at 52.5mn t/yr, according to data released by logistics providers.

DBCT provides port services for many smaller mining firms in Queensland, many of which are struggling to place product in the oversupplied seaborne market. Some of DBCT's mining customers have also scaled back production because of safety issues.

By Jo Clarke

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