Australia Newcastle coal vessel queue renews 2020 high

The vessel queue outside Australia's Newcastle port has hit a new 2020 high of 27, following extreme weather, a damaged shiploader and as unionised tug workers stepped up industrial action.

The queue grew from 24 last week and eight two months earlier, after a heat wave and strong winds battered the New South Wales port over the weekend. Temperatures reached 40֯C on 29 Sunday and 38֯C on Saturday and were accompanied by extreme winds, which slowed work at the port including repair work on the Newcastle Coal Infrastructure Group (NCIG) shiploader that was damaged by storms on 16 November.

NCIG operates berths K8, K9 and K10 at the Kooragang Island terminal in Newcastle. But is still only shipping from K8 and K9, while it works to rectify the problems with the shiploader. There are no vessels booked to leave from K10 before 14 December at the earliest. NCIG declined to comment on when the shiploader will be back in operation.

Initial shipping data suggests that NCIG has shipped less coal in November than in October, which was the weakest shipping month for the terminals since February.

The unionised tug crew operating the nine Svitzer vessels at Newcastle initiated an overtime ban from the morning of 30 November, following two four-hour strikes on 25 November. The stoppages are part of industrial action by the Maritime Union of Australia and the Construction Forestry Mining and Energy Union against Svitzer, which the unions accuse of using Covid-19 to change their members' working conditions. The overtime ban will apply to all Svitzer locations, including the smaller coal ports of Port Kembla and Brisbane.

Thermal coal prices ticked up last week, despite the Chinese import ban on Australian coal, as concerns grew about Newcastle's capacity to deliver shipments.

Argus last assessed high-grade Australian thermal coal at $65.11/t fob Newcastle for NAR 6,000 kcal/kg on 27 November, up from $59.38/t on 20 November and from a recent low of $46.18/t on 4 September. It assessed lower grade coal at $42.04/t fob Newcastle for NAR 5,500 kcal/kg on 27 November, up from $37.66/t on 20 November and $35.04/t on 4 September.

NCIG has a nominal capacity of 66mn t/yr and plans to expand to 79mn t/yr. It operated at an annualised rate of 57mn t/yr in November last year, which means that it has some capacity to manage the disruption from the shiploader disruption.

UK-Australian resources firm BHP owns 28pc of NCIG, Australian coal producer Whitehaven owns 26pc, China's Yancoal owns 27pc, US energy firm Peabody 10pc and Thai power firm Banpu 9pc. Banpu also owns Australian thermal coal producer Centennial.

By Jo Clarke