<article><p class="lead">The main rail line connecting Australian thermal and semi-soft coking coal mines in the Hunter valley region of New South Wales (NSW) to the key port of Newcastle will reopen progressively from 14 July, after it was closed by flooding on 5 July.</p><p>The first coal trains will travel along the Hunter valley line to key NSW power stations on the evening of 14 July, with more coal trains bound for the port of Newcastle expected to move through the network from 15 July. Repairs to the Blue Mountains and Moss Vale to Unanderra lines are likely to take several weeks, after landslides associated with the same heavy rainfall event closed both lines.</p><p>It will take several days for the Hunter valley network to return to normal throughput and several weeks for the backlog of coal shipments to be cleared. The vessel queue outside of Newcastle has risen to 42 from <a href="https://direct.argusmedia.com/newsandanalysis/article/2347258">32 on 4 July</a> when the wet weather system developed along the NSW coast. The anchorage at Newcastle has been closed for nearly two weeks because of the heavy swells and high winds associated with the weather system.</p><p>Storms are also lingering in the Illawarra region of NSW, with the Port Kembla Port Authority issuing an adverse weather forecast on 13 July. Ships have been off anchorage outside the port since 2 July, with six vessels offshore waiting to enter the port.</p><p>Deliveries to Port Kembla are being disrupted by the closure of the Moss Vale to Unanderra rail line, following a landslip. The line is unlikely to reopen before September, disrupting deliveries of coal and grains. Port Kembla has options to receive bulk goods by truck but this is much more expensive than rail delivery.</p><p>The Blue Mountains train line, which connects the western coal fields of NSW to Sydney and the ports of Newcastle and Port Kembla, also remains closed and will take weeks to repair following a landslide last week. The closure of the line, which was <a href="https://direct.argusmedia.com/newsandanalysis/article/2311286">shut for around a month from mid-March</a> because of a similar incident, mostly affects coal deliveries from Thai-owned Centennial's Springvale, Airly and Clarence mines.</p><p>The Hunter valley floods follow <a href="https://direct.argusmedia.com/newsandanalysis/article/2310240">significant flooding in March</a> that left most of its coal mines saturated with water storage facilities full.</p><p>Argus last assessed high-grade 6,000 kcal/kg NAR thermal coal at $403.64/t fob Newcastle on 8 July, up from $383.82/t a week earlier on concerns about supplies but down from a peak of $425.90/t on 20 May. It assessed lower grade 5,500 kcal/kg NAR coal at $193.41/t fob Newcastle on 8 July, up from $188.73/t on 1 July but down from a peak of $287.15/t on 11 March.</p><p>Argus last assessed the semi-soft mid-volatile metallurgical coal price at $218.35/t fob Australia on 13 July, down from $400/t on 31 May but up from $126.90/t on 19 July last year.</p><p>It is extremely unusual for thermal coal to trade at a premium to metallurgical coal. The relative strength of high-grade thermal coal prices to semi-soft coking coal prices could prompt producers to switch sales to thermal coal.</p><p class="bylines">By Jo Clarke</p><p><div class="picture"><div><span class="pic_title">Australian metallurgical coal prices</span> <span class="units">($/t)</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/07/14/australianmetallurgicalcoalprices14072022043201.jpg"></div><p><div class="picture"><div><span class="pic_title">Australian thermal coal prices</span> <span class="units">($/t)</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/07/14/australianthermalcoalprices14072022043201.jpg"></div></article>
