El Nino to end in April-May: Australia’s BoM

  • Market: Agriculture, Coal, Coking coal, Fertilizers
  • 06/02/24

The El Nino weather phenomenon has peaked and is declining, Australia's Bureau of Meteorology (BoM) said, pointing to neutral El Nino–Southern Oscillation levels developing in the southern hemisphere from April.

International forecasts and observations suggest surface temperatures in the equatorial Pacific are expected to return to neutral levels, indicating neither an El Nino nor La Nina phenomenon by April or May, with the latest climate model from the BoM returning to neutral in June.

The forecast for more neutral climate drivers comes after a wetter than expected summer for much of eastern Australia, foreshadowed by a positive Southern Annular Mode (SAM) in December-January, which typically brings above average rainfall for parts of eastern Australia and Tasmania. The SAM will become briefly positive in early February before returning to neutral, the BoM said on 6 February.

February rainfall is forecast to be below median for most of Australia, with February-April rainfall likely to be below median for northern Australia, including the coal-producing areas of Queensland state's Bowen basin.

The Madden–Julian Oscillation (MJO) is currently over the western Pacific, where it increases the chance of above average rainfall across northeastern Australia. But most models suggest it will move eastwards, losing strength this week.

Australia's wetter and milder than anticipated summer weather led to predictions of lower farm incomes for the 2023-24 year ending 30 June, and concerns about bushfires affecting key export corridors for commodities such as coal, which have not eventuated so far.

Cattle supply has been impacted by the lingering effects of ex-Tropical Cyclone Kirrily, which led to localised flooding in parts of Queensland, with wet conditions across the region cutting demand for bitumen productsCoal loadings were disrupted at a number of Queensland's ports and slowed chartering activity, although terminals reopened two days later. But the wetter-than-expected weather has been blamed for coal ship queues remaining long in 2024.

Australian cattle slaughter rates, which were predicted to rise significantly in 2024 under El Nino conditions, may be revised down if fewer breeders are directed to processors because of more positive weather patterns.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

Poland's JSW declares force majeure on coking coal


15/04/24
News
15/04/24

Poland's JSW declares force majeure on coking coal

Warsaw, 15 April (Argus) — Polish coking coal and met coke producer Jastrzebska Spolka Weglowa (JSW) declared force majeure on some of its coking coal contracts and cut its output outlook following a fire at its Budryk mine on 5 April. JSW expects production at Budryk mine — which produces premium hard coking coal, semi-soft coking coal, as well as thermal coal grades — to fall by 400,000t than previously planned as a result of the blaze. The fire affected a long wall located at a depth of 1,290m that was planned for closure, but it forced the evacuation of mines from affected areas, the company said. A fire that broke out at the firm's premium hard coking coal-focused Pniowek mine in December last year will also result in greater production loss than previously expected, JSW said. Output at Pniowek will be down by 450,000t from the 350,000t reduction estimated in December. JSW operates four mines in southern Poland. In the first quarter of this year, JSW produced 2.4mn t of coking coal, representing a decline of about 10pc both on the year and on the quarter. JSW's production of coke reached 830,000t in the first quarter of this year, up by 8pc on the year but down by 5pc from the fourth quarter of last year. Metallurgical coke typically accounts for about three-quarters of JSW's total coke output. Its met coke sales significantly exceeded output, reaching 990,000t in the first quarter of this year. JSW last year produced 10.9mn t of coking coal, down by 1pc on the year, and 3.35mn t of coke, up by 4pc on the year. By Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Michigan organic hens culled over bird flu


12/04/24
News
12/04/24

Michigan organic hens culled over bird flu

Washington, 12 April (Argus) — At least 2mn head of organic egg layers have been culled by egg producer Herbruck's Poultry Ranch in Michigan because of an outbreak of Highly Pathogenic Avian Influenza (HPAI), according to market sources. The US Department of Agriculture's Animal and Plant Health Inspection Service (USDA APHIS) has detected HPAI in Michigan poultry operations in recent weeks. APHIS data indicates that 4.076mn head of poultry were culled in Ionia County, Michigan, where Herbruck's is located, during the first two weeks of April. Argus estimates that 2mn head of organic egg layers consume about 4,500 bushels of organic corn and 63 short tons of organic soybean meal per day. Herbruck's operations are not expected to return to normal until late summer or early fall, which would lead to deliveries of organic corn and soybean meal being delayed or shifted to other buyers until mature replacement egg layers can be raised. Herbruck's did not immediately respond to a request for comment. The cullings are expected to have a sizable impact on the Michigan organic corn market, as Herbruck's is among the largest users of organic corn in the region, according to market sources. Deliveries of old crop organic corn contracts are being delayed and rolled forward to the fall 2024 new crop for delivery, the source said. With the rolling forward of old crop contracts, some new crop 2024 contracts have been canceled outright, they said. According to industry contacts, organic corn deliveries being pushed from old crop to new crop has left farmers in the region concerned about having sufficient storage space for new crop corn come harvest. As a result, organic farmers in Michigan are expressing interest in taking lower bids that previously received little interest in order to clear old crop out of their bins. The rush to sell old crop organic corn could boost liquidity in the market, especially from the sell side, and apply further bearish pressure to the market as farmers compete to clear out bin space. The Argus Corn Belt delivered spot price for feed grade organic corn fell by 4¢/bushel in the week ended April 6 to $7.25/bushel. The H5N1 variant of HPAI was discovered in the first commercial poultry flock in February 2022. In March this year, HPAI was confirmed in US dairy herds , with confirmed dairy cases in seven states as of 11 April. By Alexander Schultz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Engie to switch Chile coal plant to energy storage


11/04/24
News
11/04/24

Engie to switch Chile coal plant to energy storage

Santiago, 11 April (Argus) — French utility Engie is investing approximately $180mn to convert its former Tocopilla coal plant in northern Chile's Antofagasta region into a 116MW standalone battery energy storage system (BESS). The BESS Tocopilla plant will be able to store 660MWh captured from significant solar and wind curtailment in the north, which has risen by almost 250pc to 1,699GWh in the year-to-date compared to a year ago. The project involves installing 240 lithium ion-based containers on the former coal plant's site and making use of infrastructure synergies such as its transmission assets. Construction is scheduled to start in June. BESS Tocopilla will have an average annual generation capacity of 211GWh, the equivalent of supplying almost 90,000 Chilean homes with power, avoiding the emission of 51,231 t/yr of carbon dioxide equivalent, said Engie. Engie disconnected the 268MW Tocopilla coal and fuel oil plant in September 2022. Its 394MW combined-cycle Tocopilla gas plant, part of the same complex, continues to operate. Engie is the country's fourth-largest generator with an installed capacity of almost 2.5GW. BESS Tocopilla is its fourth industrial-scale storage project in Chile, one of which is already in operation and another two under construction. By Emily Russell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japanese firms target ammonia-fuelled bulk carrier


11/04/24
News
11/04/24

Japanese firms target ammonia-fuelled bulk carrier

Tokyo, 11 April (Argus) — A group of Japanese companies plan to work with Germany-based engine manufacturer MAN Energy Solutions in developing an ammonia-fuelled bulk carrier. Shipping firms Kwasaki Kisen Kaisha (Kline) and NS United Kaiun, trading house Itochu and vessel engineering firms Nihon Shipyard and Mitsui E&S signed an initial agreement on 10 April to develop a pilot 200,000dwt-class bulk carrier equipped with an ammonia-fuelled engine. The vessel will be used to collect data for building future commercial ships. Kline said it is unsure when the pilot vessel will be commissioned and when it will begin operating the ammonia-fuelled bulk carriers. The companies are also currently unsure how much ammonia will be needed for voyages. MAN Energy Solutions and Mitsui E&S will develop the ammonia-fuelled engine, Nihon Shipyard will build the vessel, while Itochu, Kline and NS United Kaiun will manage the ship to collect operating data. Itochu will also be in charge of sharing ammonia supply chain-related information. Japanese shipping firm NYK Line, engine developers IHI Power Systems and Japan Engine, Nihon Shipyard and Japanese classification society Class NK are also attempting to build an ammonia-fuelled ammonia carrier , targeting a commissioning in 2026. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more