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Anglo declares FM after Grosvenor coking coal mine fire

  • Market: Coking coal
  • 05/07/24

UK-South African mining firm Anglo American has declared force majeure (FM) on Moranbah deliveries from the fourth quarter of 2024 after its Grosvenor coking coal mine closed on 29 June.

Anglo American has suspended production at its Grosvenor mine in the Bowen basin region of Australia's Queensland because of an underground methane gas ignition. The company was instructed by independent regulator Resources Safety and Health Queensland on 29 June to suspend all operations and activities underground.

"These events are beyond our reasonable control and will partly or wholly prevent, hinder, or delay our ability to meet our delivery obligations of the product under the contract from the fourth calendar quarter of 2024," the company said in a letter to customers seen by Argus. The closure is expected to last for several months, depending on ongoing evaluations, according to Anglo American.

At least four consumers across Asia with term contracted volumes of Moranbah North in the fourth quarter said they have received the FM notice in the late evening of 4 July.

Grosvenor was expected to produce 3.5mn t in 2024. Production guidance for Grosvenor was placed at 1.2mn t for the second half of 2024, a reflection of lower production because of a longwall move scheduled in the third quarter of 2024.

Supply concerns for the immediate term were alleviated when Anglo American informed several steel mills and trading firms on 3 July that it expects to meet its contracted obligations for the third quarter. Before that, the mine closure incident appeared to have initiated a string of higher trades in the paper market and prompted the sale of a 40,000t Goonyella cargo with 1-10 August laycan to a trading firm at $260/t fob Australia on 2 July.

"They were planning longwall moves at Moranbah and Grosevenor during this quarter so it does make sense that they would have planned reduced sales during the same, so meeting [third quarter] commitments and declaring FM on [fourth quarter] does check out," an Australian supplier said. Many expected the mining firm to issue an FM for the fourth quarter, with one source suggesting that "running down stockpiles can only continue for so long".

Consumers that received the FM notice said they were assessing the ongoing impact to their operations. It remains unclear whether the impact would be a delay or a cancellation to shipments, one consumer said. Two others said their exposure to term contracted volumes of Moranbah North with the mining firm was limited and they may seek alternative coals from markets such as Australia, Canada or Mozambique if required.

Market participants agreed that a reduction in supply would likely be reflected in market prices in the longer run. "This will take 3.5mn t/yr of premium mid-volatile coal out of the market, a meaningful volume that will structurally tighten the prime coal segment," an international supplier said. "The market feels like there's an overhang of prime coals especially from Canada recently, but we don't expect that to go on for too long. When that is used up, finding alternatives might be challenging," he added.

Argus assessed the premium hard low-volatile coking coal price at $255/t fob Australia on 4 July, down from a year-to-date high of $336.25/t on 12 January.


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19/07/24

Australia’s Whitehaven hits 2023-24 coal guidance

Australia’s Whitehaven hits 2023-24 coal guidance

Sydney, 19 July (Argus) — Australian coal producer Whitehaven met its production guidance for its New South Wales (NSW) mines in the 2023-24 fiscal year to 30 June, with managed run-of-mine (ROM) output from its newly acquired Queensland mines also meeting their guidance. Saleable coal production at Whitehaven's NSW-based assets totalled 16.7mn t for 2023-24, up by 6pc on the 15.7mn t recorded last fiscal year and within its guidance for 2023-24 of 16mn-17.5mn t. Saleable output from NSW for April-June was 4.3mn t, 11pc higher than January-March's 3.87mn t and above the year earlier figure of 3.83mn t. Saleable production from Queensland totalled 4mn t, Whitehaven's first quarter since acquiring Australian-Japanese joint venture BHP Mitsubishi Alliance's 12mn t/yr Blackwater and 4mn t/yr Daunia coking and thermal coal mines on 2 April. Queensland coal sales of 3.2mn t for the quarter reflected slippage into July-September because of now resolved, transition-related rail constraints from Daunia, Whitehaven said. A selldown of around 20pc of Blackwater to global steel producers is progressing, the firm reported, without providing further details. The first production and sales have been achieved at the 10mn t/yr Vickery mine , while operations ceased during April at the 2.5mn t/yr ROM capacity Werris Creek mine. Whitehaven's overall unaudited unit cost guidance, excluding royalties, for NSW in 2023-24 was A$114/t ($76/t), above the guidance range of A$103-113/t because of lower production at Narrabri and underlying inflation. Capital expenditure was A$380mn, below the 2023-24 guidance of A$400-480mn. The Argus high-grade 6,000 kcal/kg NAR price averaged $133.46/t fob Newcastle and the 5,500 kcal/kg NAR coal price $88.47/t during April-June compared with $126.74/t and $93.85/t respectively for January-March. Whitehaven's full-year results will be published on 22 August. By Tom Major Whitehaven results Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 Volumes (mn t) Managed coal production 8.3 3.9 3.8 Managed coal sales 7.3 3.8 3.9 Managed coal stocks 2.7 1.0 1.5 Coal sales revenue mix (%) Metallurgical coal 59 13 5 Thermal coal 41 87 95 Prices achieved ($/t) NSW average 137 136 177 Queensland average 180 Source: Whitehaven Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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BHP cuts 2024-25 met coal target with divestment


17/07/24
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17/07/24

BHP cuts 2024-25 met coal target with divestment

Shanghai, 17 July (Argus) — Australian resources firm BHP has set a lower coking coal production target for the 2024-2025 financial year that started on 1 July, after its divestment of the Blackwater and Daunia mines. But the miner has also set its sights on increasing output from its remaining assets. The BHP Mitsubishi Alliance (BMA), which is 50pc owned by BHP and 50pc owned by Mitsubishi, has set lower production targets of 33mn-38mn t for 2024-25. The targets are reflective of the sale of its Blackwater and Daunia mines to Australian producer Whitehaven Coal that was completed on 2 April, and the impact of elevated strip ratios. The two mines together contributed 10mn t on a 100pc basis to the 2023-24 production before their divestment, the company said on 17 July. BMA met its production guidance of 43mn-45mn t by producing 44.6mn t of coal in the 2023-24 financial year to 30 June. Production fell by 22pc from a year earlier, because of an extended longwall move and geotechnical issues at Broadmeadow in the first half of the fiscal year, the disruption at its 10mn t/yr Saraji mine in Queensland , as well as increased waste removal and stockpile rebuilding after the disruption caused by wet weather and labour shortages in 2023. BHP received an average price of $271.26/t for hard coking coal and $206.84/t for weak coking coal in January-June, compared to an average of $276.22/t and $250.38/t in January-June 2023. It defines hard coking coal as those with a coke strength after reaction (CSR) of 35 and above and weak coking coal as those with a CSR of below 35. BHP expects to be in the lower half of its cost guidance for the 2024 fiscal year. Expectations of lower production volumes led BHP to increase its cost guidance for the 2024 fiscal year to $119-125/t in April from $110-116/t in January and from $95-105/t in June 2023. The firm is expecting production to increase to 43mn-45mn t/yr in the next five years, once stockpile rebuilding reaches a sustainable level and strip ratios normalise. Argus last assessed the premium hard low-volatile metallurgical coal price at $236/t fob Australia on 16 July, down from $326.70/t on 2 January. BHP metallurgical coal sales mn t Coal type Apr-Jun '24 Jan-Mar '24 Apr-Jun '23 FY 2023-24 FY 2022-23 % Coking coal 4.86 5.41 7.45 19.52 24.31 -20 Weak coking coal 0.04 0.93 1.06 2.25 3.1 -27 Thermal coal - 0.02 0.36 0.52 1.16 -55 Total BMA 4.9 6.36 8.88 22.29 28.57 -22 Total BMA (100%) 9.81 12.72 17.75 44.59 57.14 -22 Source: BHP Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cliffs to buy Canadian steelmaker Stelco


15/07/24
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15/07/24

Cliffs to buy Canadian steelmaker Stelco

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EIA raises US coal power forecast for 2024-25


09/07/24
News
09/07/24

EIA raises US coal power forecast for 2024-25

Houston, 9 July (Argus) — Coal-fired generation in the US is expected to be higher this year and in 2025 compared with 2023 levels in response to elevated natural gas prices, government projections released today show. Coal power will increase by 2.7pc from a year earlier to 688.5bn kWh in 2024, the US Energy Information Administration (EIA) projected in its monthly Short-Term Energy Outlook today. Coal generation in 2025 will then slip to 674.5bn kWh, which would still be slightly higher than 2023's 670.7bn kWh. The coal generation outlooks for this year and next are both above what EIA projected in June. Today is also the first time this year that EIA said it expected 2024 coal power to top 2023 levels. "After reviewing the responsiveness of fossil fuel generation to natural gas prices, we now expect more power generation from coal and less from natural gas than we did in our previous forecast, especially during the winter," EIA said. The agency projected spot natural gas prices at the Henry Hub to average $2.49/mmBtu this year, down from $2.54/mmBtu in 2023. But gas prices in the second half of 2024 will be higher than they were in both the first six months of this year and in the back half of 2023, and prices will continue to rise in 2025. The spot price at the Henry Hub will average $3.29/mmBtu in 2025, EIA projected. Natural gas-fired generation is expected to inch up by 1.4pc from a year earlier to 1,719.4bn kWh in 2024 but then slide below 2023 levels to 1,695.3bn next year, as the higher prices suppress demand for gas. EIA said overall US electricity generation was 5pc higher in the first half of 2024 than the same period last year as a result of higher-than-normal temperatures in June and rising demand from some businesses. The agency expects electric power dispatch in the second half of this year to be 2pc higher than in the same period of 2023, and for renewable power to have the greatest rate of growth during that time. Solar power is forecast to be 121.4bn kWh in the second half of this year, which would be 42pc higher than a year earlier. Wind generation is expected to rise by 12bn kWh, or 6pc, during this time to 208.7bn kWh. The greater solar and wind generation is at least partly because of more projects coming on line. EIA expects the US to have 127.3GW of solar generating capacity and 155.2GW of wind by the end of this year, compared with 90.2GW and 147.6GW, respectively, in the fourth quarter of 2023. Coal generating capacity is expected to continue to slip, to 174.3GW in by the end of this year from 177.1GW in the fourth quarter of 2023, according to EIA. Coal's portion of the nation's generating capacity mix will then drop more sharply in 2025 to 162GW as coal-fired plant retirements start to accelerate. The higher outlook for coal generation this year led EIA to raise its expectations for electric power coal consumption by 3.8pc from the agency's June outlook, to 395.5mn short tons (358.8mn metric tonnes) in 2024. That also would be higher than the 387.2mn st consumed in 2023. But US coal production is still expected to fall by 12pc this year to 509.7mn st this year. US thermal coal exports are expected to rise to 53mn st this year and to 55mn st in 2025 from 48.5mn st in 2023. EIA forecast metallurgical coal exports will be about 49mn st in 2024 and 49.2mn st in 2025 compared with 51.3mn st last year. By Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Anglo assures customers of 3Q met coal shipments


03/07/24
News
03/07/24

Anglo assures customers of 3Q met coal shipments

Shanghai, 3 July (Argus) — UK-South African mining firm Anglo American has today informed several steel mills and trading firms that it expects to meet its contracted obligations for the third quarter, Argus has learned. This follows the closure of Anglo American's 5mn t/yr Grosvenor coking coal mine in the Bowen basin region of Australia's Queensland, following an accident in late June. Anglo American is "evaluating the impact of this incident and is expecting to perform on its third-quarter obligations as planned at this moment, subject to change depending on further assessment", an Asian steel mill source said. Others said the same, with an Indian buyer stating that the company is "not expecting any material impact to supply in the short term, since the miner is expected to meet third-quarter commitments". Some sources cautioned that cargo delays are still anticipated, with one trading source expecting delays of more than 20 days. Production at Grosvenor had been strong for the past couple of months, after a challenging 2023 . The producer increased spot offers on the market in the past two months, with at least three July-loading Panamax cargoes sold and at least two Panamax cargoes being offered for August loading, before the 29 June accident. The paper market also cooled down today after sharp increases earlier this week, market participants said. Fob Australia premium futures contracts were trading at around $253-254/t and $257-258/t for July and August, respectively, on 3 July, falling by around $8-10/t from 2 July. Supply availability for the fourth quarter remains uncertain, with some market participants expecting the market to tighten in anticipation of stronger demand. "There is some demand surfacing from India this week for August and September-loading cargoes, so prices may see some support once September cargoes are being discussed, because other mines are also going to be in maintenance during that time," an international trader said. The Argus premium low-volatile hard coking coal price was assessed at $257.50/t fob Australia on 3 July, down by $2.10/t from 2 July. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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