Australian thermal coal exports rebound: Update

  • Market: Coal
  • 03/12/20

Adds charts and additional detail throughout

Australia's thermal coal exports rebounded in October from a weak September, driven by increased shipments to China, strong buying from India and deliveries to South Korea.

Australia exported 17.24mn t of thermal coal in October, up from a revised 14.89mn t in September, but down from 18.75mn t in October 2019, according to the Australian Bureau of Statistics (ABS).

November exports are likely to have been much lower, with the main New South Wales thermal coal port of Newcastle shipping 11.9mn t, down from 14.9mn t in October. Australia exported 28.2mn t of thermal and coking coal last month, according to Argus analysis of shipping data, with around 14mn t likely to have been thermal coal, based on the historical split between the two, down from 14.6mn t in November 2019.

December is usually a stronger month for thermal coal shipments and there are long queues of vessels waiting to load at Newcastle. But several mining firms are considering closing over Christmas as Chinese bans on imports of Australian coal weigh on demand.

Australian thermal coal exports to China increased by 30pc in October from September's nine-year low, but were still 60pc, or 2.5mn t, down on the year. January-October exports to China of 34.3mn t were 19pc down on the year — the sharpest fall of any major Asian customer, despite China recovering more swiftly from Covid-19 than other countries in the region.

Tensions between Beijing and Canberra continue to rise, with China excluding Australian coal from the temporary lifting of restrictions on imports through ports in southern Guangdong province.

Shipments to India in October fell from September's six-year high, but were still 640,000t up on the year. Strong exports in September-October pushed January-October sales to India up by 59pc on the year.

Exports to northeast Asian markets excluding China grew by 230,000t on the year, driven by Japan, but lower shipments to Cambodia, Malaysia and Thailand curbed total exports to southeast Asia.

Other notable destinations for Australian coal included Chile, with January-October loadings trebling on the year to 1.6mn t. And Pakistan received 570,000t, having previously imported Australian coal in 2017.

The Argus Newcastle 6,000 kcal/kg price averaged $54.20/t fob Newcastle in October, up from $48.54/t in September, but down from $64.32/t in October 2019. It was assessed at $65.11/t on 27 November.

The Argus Newcastle 5,500 kcal/kg price averaged $39.52/t in October, up from $37.54/t in September, but down from $49.94/t in October 2019. It was assessed at $42.04/t on 27 November.

The heat-adjusted price differential between the Argus Newcastle 6,000 kcal/kg and 5,500 kcal/kg prices on a 6,000 kcal/kg basis widened to $19.25/t on 27 November from an average of $11.09/t in October and $7.59/t in September.

Australia's average thermal coal export price was $54.11/t in October, up from $53.08/t in September, but down from $63.64/t in October 2019, according to the ABS.

October prices were based on ABS' exchange rate of $0.7498 to the Australian dollar.

Thermal coal export revenues totalled A$1.24bn in October, up from A$1.08bn in September, but down from A$1.75bn in October 2019.

Australian thermal coal exports(mn t)
DestinationOct% ± vs Sept*% ± vs Oct '19Jan-Oct% ± vs Jan-Oct '19
China1.7330.43-59.5534.32-18.46
India1.05-9.74156.854.5358.77
Japan6.139.436.4058.99-4.01
South Korea4.0046.033.7332.044.40
Taiwan1.44-26.77-16.4119.06-8.47
Vietnam1.0663.030.7111.3030.75
Total17.2412.03-8.03174.98-2.92
*adjusted to account for shorter and longer months

Australian thermal coal exports mn t

Annual change in exports (Oct 2020) mn t

Australian Jan-Oct thermal coal exports mn t

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
27/03/24

Hampton Roads may have space for Baltimore coal exports

Hampton Roads may have space for Baltimore coal exports

Houston, 27 March (Argus) — Terminals in Hampton Roads, Virginia, may have some available capacity to take rerouted coal shipments from Baltimore, Maryland, despite increasing exports from a year earlier for the seventh consecutive month in February. Coal loadings at Hampton Roads reached an estimated 3.31mn short tons (st) (3mn metric tonnes) last month, rising 7.8pc from February 2023, according to the Virginia Maritime Association. Still, historic Hampton Roads export data going back to 1993 showed that combined shipments from the three terminals in the region peaked at 5.48mn st in April 2012, which is nearly 66pc higher than last month's exports. This suggests that Hampton Roads terminals may have capacity to load additional coal volumes that were originally booked to ship out of terminals upstream from the Francis Scott Key Bridge in Baltimore, which collapsed on Tuesday morning, closing the Port of Baltimore for an indefinite period of time. The two Baltimore coal terminals cut off by the bridge collapse, Consol Energy's Consol Marine Terminal and CSX's Curtis Bay Coal Piers, have a combined export capacity of about 34mn st. Railroad Norfolk Southern (NS), which operates the Lamberts Point terminal at Hampton Roads, said today it is working with impacted international customers and port partners to "provide alternate routing solutions." "Ports on the east coast are resilient and have the capacity to serve the flow of freight," NS said. Lamberts Point terminal handled 1.19mn st of coal in February, a 20pc jump from February 2023. Despite this increase, that is still down from the 2.18mn st exported from the terminal in April 2012. Dominion Terminal Associates (DTA) exported 1.24mn st of coal in February from the Hampton Roads area, which is down 30pc from April 2012, while exports from the nearby Pier IX terminal were down 53pc to 727,023st last month. DTA's co-owners, Alpha Metallurgical Resources and Arch Resources, and Pier IX's owner Kinder Morgan all did not respond for immediate comment. By Anna Harmon Hampton Roads coal exports in 2012 st Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

RMKO, Atlas to develop Sumatra coal crushing plant


27/03/24
News
27/03/24

RMKO, Atlas to develop Sumatra coal crushing plant

Manila, 27 March (Argus) — Indonesian coal mining contractor RMKO has partnered with domestic producer Atlas Resources to develop a coal crushing plant and other supporting mining infrastructure in south Sumatra. The crushing plant and other facilities are targeted for completion by the second half of this year, said RMKO, which is a subsidiary of coal logistics firm RMK. The plant will be built at Atlas' Mutara hub, which consists of five separate concessions in the Musi Rawas and Musi Banyuasin regency in south Sumatra and has coal reserves totalling 85mn t. Atlas has already acquired a road construction permit that will connect Mutara to the Sriwijaya Bara logistics jetty 137km away. The coal crushing plant is expected to boost coal transportation from mines to clients outside the region, the company said. RMKO will construct and operate the coal crushing plant that will have a capacity of 650 t/hr. Other services will include stockpile management, loading services and plant maintenance. The 36bn rupiah ($2.28mn) plant will be funded by RMK with Atlas paying back the investment through coal production equivalent to 200,000 t/month for five years, as well as the cost of operations and maintenance services, RMKO said. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Baltimore bridge collapse forces freight changes


26/03/24
News
26/03/24

Baltimore bridge collapse forces freight changes

Washington, 26 March (Argus) — Vessel traffic in and out of the Port of Baltimore, Maryland, has been suspended indefinitely in the wake of a container ship collision early today that brought down the Francis Scott Key Bridge, an accident that will force the rerouting of coal, car and light truck shipments. The prolonged closure of one of the largest ports on the US east coast could have a ripple effect on trade flows across much of the US, as shippers grapple for alternatives in the absence of a certain reopening timeline. Search and rescue efforts are still ongoing in the Patapsco River, after the 116,851dwt Dali headed to Colombo, Sri Lanka, slammed into a bridge support. The crew had lost control of the vessel. The Dali is owned by Grace Ocean and managed by Synergy Marine Group. The Maryland Port Administration said it does not know how long it will take for the shipping channel to be cleared and for traffic to resume. Shipping companies are bracing for a closure of at least two weeks, but many expect the clean-up effort could take significantly longer. President Joe Biden vowed the federal government will provide whatever resources are needed to get the port "up and running again as soon as possible." The port is a major trade hub for steam and coking coal, automobiles and scrap metal. Many market sources are still trying to determine whether the disruption will be dramatic enough to move prices. But coal markets were already being affected today. Baltimore is home to two key coal export terminals: eastern US railroad CSX's Curtis Bay Coal Piers and coal producer Consol Energy's Consol Marine Terminal. The facilities are upstream of the bridge, meaning ships will not be able to serve them until the route reopens. The terminals handle thermal and coking coal from Northern and Central Appalachia. They have a combined export capacity of 34mn short tons (30.8mn metric tonnes). The two terminals loaded 2.4mn t of coal in February, up from 2.1mn t a year earlier, according to analytics firm Kpler, mostly exports to India and China. An India-based trader said that the suspension of coal exports will probably raise prices in India, as brick kilns enter the peak production season in the summer. Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value. Prices for deliveries to northern Europe are also likely to rise given that the Netherlands, Germany and Belgium combined are the second-largest market for North Appalachian coal. April API 2 futures rose by $2/t to $113.30/t. The incident has added a "level of volatility [which] could have big implications," a European paper broker said. The lack of information has prompted some coal producers to hold off on activating force majeure clauses in their contracts. Curtis Bay is served only by CSX, while CSX and fellow eastern carrier Norfolk Southern serve Consol. CSX said it is in contact with existing coal customers and contingency plans are being implemented. The railroad at this point intends to keep Curtis Bay open but will continue to assess the circumstances moving forward. Norfolk Southern did not respond to questions. Some scheduled Baltimore coal exports may be redirected to the other three eastern US coal export terminals in Hampton Roads, Virginia, but such reroutings likely will entail increased costs. Not all coal mines will be able to shift terminals. Such decisions will depend on available capacity in Hampton Roads. Exports from the three terminals in January reached a five-year high , signaling somewhat limited capacity. Mine location and railroad access may also determine whether coal can be rerouted, an industry source said. But some producers do not have much of a choice about trying to send coal to Hampton Roads. They may need the cash so will be forced into a decision. The producers most vulnerable to delays may be Consol and Arch Resources. Arch's Leer coking coal mine may be in the best position because it co-owns Dominion Terminal Associates in Hampton Roads with Alpha Metallurgical Coal Resources. The sudden lack of export capacity could put a floor under US coal prices, which have mostly been falling since last year amid low domestic demand. The competition to replace Baltimore coal exports could prevent further cuts, another coal trading source said. Metals sources say the accident will have only isolated effects on the global ferrous scrap market, but many market participants are still assessing the situation. The port is the 10th largest ferrous scrap export port in the US, and over the last five years an average of 44,000 metric tonnes/month of ferrous scrap was exported from Baltimore, according to US Department of Commerce data. But the port closure is likely to affect other freight. Baltimore is the nation's top handler of automobile traffic. Motor vehicles and parts accounted for about 42pc of all Baltimore port imports and 27pc of all exports, according to state data. The Port of Baltimore handled 847,158 cars and light trucks in 2023. "It's too early to say what impact this incident will have on the auto business — but there will certainly be a disruption," said John Bozzella, chief executive of industry trade group Alliance for Automotive Innovation. Dry bulk freight rates likely unaffected Several sources told Argus Baltimore's closure is unlikely to have a major impact on dry freight rates despite short-term interruptions to coal transports. "We are in the shoulder months with less demand for thermal coal," a shipbroker said, suggesting mild global temperatures means the collapse "may not have too much of an impact" on freight markets overall. Vessel traffic in ports such as Charleston, South Carolina, and Savannah, Georgia, may increase on diversions from Baltimore. Kpler identified 17 vessels that will likely be impacted because they are either in the Port of Baltimore or were expected to load there in the coming days. By Abby Caplan, Gabriel Squitieri, Luis Gronda, Evan Millard and Brad MacAulay Port of Baltimore coal terminals Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US bridge collapse may weigh on dry freight rates


26/03/24
News
26/03/24

US bridge collapse may weigh on dry freight rates

New York, 26 March (Argus) — The collapse of a major bridge in the Port of Baltimore, Maryland, will likely put downward pressure on dry bulk rates as ship traffic in and out of the port remains closed indefinitely. Market participants differ on the extent of any such market pressure, however. "We are in the shoulder months with less demand for thermal coal," a shipbroker said, suggesting mild global temperatures meant the collapse "may not have too much of an impact" on dry freight markets overall. Some coal suppliers will be able to load their cargoes at ports such as Hampton Roads, said two shipbrokers. This could partly mitigate any potential downward pressure on rates from suspended vessel traffic in Baltimore that would come from decreased cargo demand. But a third shipbroker doubted much US coal could be diverted to other east coast ports. Panamax rates would likely decline because "coal, unlike other commodities cannot easily pivot to alternate ports," she said. The loss of cargo could expand Panamax tonnage supply in the Atlantic, she said. "It is conceivable that Panamax intended for coal will now head south as long as they can present grain clean lengthening tonnage lists which will drive down rates." Meanwhile, vessel traffic in ports such as Charleston, South Carolina, and Savannah, Georgia, may increase on diversions across many shipping segments from Baltimore, according to market contacts. By Gabriel Squitieri and Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Stuck Baltimore coal may raise prices in India, Europe


26/03/24
News
26/03/24

Stuck Baltimore coal may raise prices in India, Europe

London, 26 March (Argus) — The blocking of two coal terminals in the key Baltimore US coal export hub this morning following a bridge collapse will mostly hinder North Appalachian coal exports to India for the brick kiln industry. Most thermal coal exports from Baltimore's two coal terminals, Consol Marine Terminal (CNX) and Curtis Bay Piers, flow to India, with 12.4mn t shipped last year and 6.3mn t in 2022, US customs data show. Baltimore exported just over 900,000t to India in January, up from 364,000t a year earlier. The port did not provide a timeline as to when the terminals may resume coal exports as of 26 March. Suspended North Appalachian shipments will probably raise prices in India, as brick kilns enter the peak production season in the summer, an India-based trader said. The brick kiln industry typically consumes very-high calorific value NAR 6,900 kcal/kg North Appalachian coal. Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value. US petroleum coke is currently more competitive than coal for Indian buyers, based on Argus spot price assessments. The price of cfr India 6.5pc sulphur coke averaged $3.74/mn Btu over 4-25 March, compared with $4.16/mn Btu for high-sulphur Illinois basin coal, the next cheapest alternative. North Appalachian coal averaged $4.86/mn Btu over the same period, down from $5.02/mn Btu in January. Some US coal is sold to India under term contracts on an API 2 index-linked price basis. Europe The Netherlands, Germany and Belgium are the second-largest market for North Appalachian coal, with close to 310,000t sent there from Baltimore terminals in January, up from just above 200,000t a year earlier. April API 2 futures rose sharply this morning to $115/t but had eased slightly to $114.50/t by noon. The incident has added a "level of volatility [which] could have big implications", a European paper broker said. In the physical market, an April-arrival 50,000t multi-origin cargo was bid at $125/t des Amsterdam-Rotterdam today, flat on yesterday. But most US material does not trade on these terms because of varying calorific value, sulphur and chlorine levels. Only around 50,000 t/month of US Scota coal is available, a European physical broker said, but this may be exported from Gulf coast ports, a different broker said. Scota — the standard coal trading agreement — is a set of terms and specifications used to trade NAR 6,000 kcal/kg coal in Europe. Some US North Appalachian cargoes were blended with metallurgical coal a year ago to reduce the calorific value and meet Scota contract specifications, but the high free-swelling index (FSI) content caused problems for power plants because this made it harder to burn as some particles do not ignite, creating more ash. Logistics North Appalachian coal producers could rail volumes around 250km south to the Hampton Roads port complex in Virginia, but this would add to railing costs. Hampton Roads typically handles Central Appalachian coal. Some North Appalachian coal is barged south to New Orleans when the eastern terminals at Baltimore and Hampton Roads become congested, according to a barge operator. The CNX Marine Terminal can store up to 1mn t and exported 19mn t of metallurgical and high calorific-value thermal coal last year, according to its full-year 2023 results. The 79,000t Klara Oldendorff is currently loading thermal coal at CNX Marine Terminal and the 79,000t Jy River is loading coal at Curtis Bay Piers. Some 22 ships are currently inside the port, of which 13 are expected to load coal. By Evan Millard Baltimore thermal coal exports mn t 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