Bad weather disrupts Queensland coking coal logistics
Heavy rain and stormy seas in Australia's Queensland have forced coking coal export terminals at the Dalrymple Bay Coal Terminal (DBCT) and Hay Point to halt vessels from berthing until 15 March. All berthing and loading operations at Abbot Point will also be suspended from tomorrow.
While Queensland's other main coal export terminal at Gladstone remains operational, some producers are still experiencing rail cancellations because of heavy rain and have been forced to slow production.
These delays could reverse expectations on prices. The coking coal market had been poised for a sharp downturn amid weaker steel demand earlier this week, although tight supplies from Australia could act as a counterbalance.
As of today, 30 vessels were waiting in the queue at Hay Point with another 28 vessels waiting to load cargoes at DBCT, the highest levels of the year.
"Now I would say the market looks firm," an Indian buyer said.
The Goonyella rail network will also have scheduled maintenance during 11-12 March.
A tropical low is currently developing offshore over the Coral Sea. Although the weather system is expected to continue away from the Australian coast, there is a chance it could circle back north towards Abbot Point over this weekend.
"We expect more rains to come next week," an Australian supplier said. "Even if the weak tropical low over the Gulf of Carpentaria does not eventually develop into a cyclone, we expect continuing rains to be enough to cause quite a bit of disruption to our deliveries."
The Argus assessment for premium hard low-volatile coking coal has increased by 6pc over the past month to $159.50/t fob Australia today despite weaker demand from most main steel-producing regions. The onset of the rainy season in Queensland in February has consistently delayed coal deliveries and slowed production in past years, despite operations rapidly returning to normal in most cases.
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Peabody maintains outlook despite weaker 1Q
Peabody maintains outlook despite weaker 1Q
New York, 2 May (Argus) — US coal producer Peabody Energy still expects to produce and sell thermal coal at or slightly below 2023 levels this year despite missing its internal sales target last quarter. The company today maintained its outlook of shipping 80mn-87mn short tons (72.6mn-78.9mn metric tonnes) of Powder River basin (PRB) coal this year and 14.5mn-15.5mn st of other US thermal coal. Peabody shipped 87.2mn st of PRB coal last year and 16.2mn st of other US thermal coal. Peabody's first quarter 2024 PRB volumes dropped to 18.7mn st — the lowest in almost four years — from 22mn st in January-March 2023 because of a warmer-than-normal winter and low natural gas prices . But the company is expecting better market conditions over the coming months. "We have already seen an uptick in some nominations for May," Peabody's chief executive officer Jim Grech said. "It looks like there is recovery starting to occur in the PRB." Grech said that the recent nominations were a little stronger than what company executives had been expecting, and Peabody is getting some early indications that the trend may continue into June. He also said that over 20 power plants have announced delays and retirement dates, given projected load growth in the US thermal market, which could support medium- to longer-term coal demand. The company has 85mn st of PRB coal under contract and priced to ship this year at an average $13.70/st. It has also 15.2mn st of other US thermal coal under contract at an average price of $54.20/st. This quarter, PRB shipments should be around 15.5mn st and have an average price of $13.80/st and other US thermal coal sales should be 3.8mn st at an average price of $54.80/st, compared with 18.9mn st and 3.8mn st in the same period of last year. The company shipped 3.2mn st of other thermal coal last quarter, down from 4.5mn st a year earlier. But it recently signed new contracts to ship 1.8mn st of this type of coal, which will support sales this quarter and in the back half of 2024. Peabody also is working with the National Mining Association and America's Power to prepare lawsuits against the Environmental Protection Agency (EPA) over the agency's newly finalized suite of emissions, effluent and coal ash rules. The agency has "overstepped" its authority and threatens grid reliability at a time of increased energy demand, the producer said. But Grech said that the new rules finalized by EPA last week are not expected to have any near-term impact on US generation mix, and opposition to EPA's new rules "puts in doubt" the impact that these rules may have in the longer-term. First quarter sales at the company's other coal business segments came in as expected. Peabody's metallurgical coal shipments inched up to 1.4mn st from 1.3mn st a year earlier, and its Australian thermal coal shipments increased to 4mn st in the first quarter of 2024 from 3.6mn st a year prior. By Elena Vasilyeva Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
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Japan's trading firms see metals prices cutting profits
Japan's trading firms see metals prices cutting profits
Tokyo, 2 May (Argus) — Major Japanese trading houses are expecting lower profits from their metals businesses during the April 2024-March 2025 fiscal year, mostly because of lower prices of commodities such as iron ore and coking coal . Japanese trading house Mitsui forecast profits for its metal and natural resource business falling by 14pc on the year to ¥290bn ($1.87bn) during 2024-25, primarily because of lower iron ore prices. Mitsui plans to cut iron ore output by 0.3pc on the year to 60.9mn t at its mining projects where the company owns production ri ghts or a production stake during 2024-25 . This includes the joint venture project Robe River in Australia with Australian iron ore producer Rio Tinto. Japanese trading house Sojitz also expects profits from its metal and natural resource business to decline to ¥35bn, down by 20pc on the year, mostly because of a bearish coking coal market. The company said its overall coal business can cut production costs during 2024-25, partly because it plans larger-scale output at the Gregory Crinum coking coal mine in Australia, without disclosing further details. But Sojitz said it cannot generate higher profits because of lower coking coal prices. The trading house expects the average coking coal price to fall to $230/t during 2024-25, according to the company's chief financial officer Makoto Shibuya, down by $57/t from a year earlier. The company reiterated that the price is not necessarily their selling price. Sumitomo expects profits from its natural resource business would remain flat at ¥72bn on the year, mostly as its nickel production in Madagascar recovers from the output cuts in 2023 , with an aim to produce 19,000t of nickel during 2024-25, up by 9.8pc on the year. A rebound in nickel production could offset possible losses from coal and coking coal prices falling to $266/t and $133/t respectively in the ordinary market, down by $21 and $9, according to the trading house. Sumitomo plans to increase coking coal production by 9.1pc to 1.2mn t but reduce coal output by 4.8pc to 4mn t during 2024-25. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
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