More Australian coal ships diverted from China

More of the Capesize vessels that were at anchor off China with east Australian coal cargoes have been diverted, although many are still waiting as a result of China's informal ban on Australian imports.

Many are waiting to unload in China, according to ship tracking site Fleetmon. Some arrived as early as June.

Ships being diverted include the Jag Anand, which departed east Australia in May. It was diverted to Chiba, Japan, for a crew change. It remains unclear whether she will unload in Japan or return to China. Indian ports and shipping minister Mansukh Mandaviya has said Indian crew members are expected home today.

In addition to this, shiptracking data show the Golden Barnet, which also departed Australia in May, has now been redirected to Busan, South Korea, while the Grand Century, which left Australia in June, has been diverted to Boryeong, South Korea, with its full cargo still onboard. The Topas, a post-Panamax, was diverted to Gunsan for a crew change, but has returned to wait off Jingtang, while the Caroline Oldendorff left Jingtang for Japan, South Korea and then Japan again, before returning to China following a crew change.

Another Capesize, the HL Hadong, which departed Australia in October, is now on course for Mundra, India, still apparently carrying coal from Newcastle, according to Fleetmon data.

No new ships have arrived in Chinese waters since late November, as a result of China's informal ban on Australian coal imports. The ban has meant Australian coal has been shipped elsewhere, including India and South Korea.

While some ships have been able to depart for a crew change, several have been waiting since arriving in June or July, including the post-Panamax carriers Bulk Malaysia, Tai Keystone, Necklace, Double Delight, Flourish Power and Hong Hing. Some ships cannot leave to change crews without losing their place in the queue and risking being unable to claim demurrage for the waiting time. Vessels waiting further north are now understood to be stuck in ice, making bunkering difficult.

Shiptracking data suggest some ships, including the Capesize Alpha Century and Aquamarine, were able to dock briefly, possibly for a crew change, but they do not yet appear to have unloaded.

It is unclear when the unofficial ban on Australian imports will end. Just last week, some market participants said they saw restrictions extending for the rest of 2021. But wet weather concerns, rumours of restrictions easing and tightness in the Australian mid-tier market saw the Australian premium low-volatile price rising by $8.35/t over the course of this week. This the first significant increase in prices since the Australian premium low-volatile coking coal price fell below $110/t at the end of October.

Chinese mills seeking supply security signed one-year deals for US coking coal with Arch Resources and a trader supplying Bluestone's Pinnacle material late last year. But the total volume of up to 675,000t agreed under the deals is small compared with the 38.74mn t of coking coal and PCI that China imported from Australia in January-November 2020. The Argus-assessed US low-volatile price has risen to $159/t fob Hampton Roads, the highest since the start of August 2019, driven by Chinese demand, while the premium low-volatile cfr China price stands at $210/t — at a premium of nearly $100/t to the fob Australia price.

By Saleem Rizvi, Will Collins and Siew Hua Seah