Australia’s east coast has been lashed by torrential rains since 24 July with NSW (New South Wales) one of the hardest hits.
The access to coal ports at NSW has been restricted and vessels are forced to leave the anchorage position. As on 23 July, 14 and 8 vessels were at anchorage and berthing position respectively at NSW ports.
The east coast of Australia has been facing heavy rains since last two weeks and weather conditions are expected to normalise by 29 Jul’20.
Australia is a major coal exporter with its exports directed towards Japan, China and South Korea. The country exported about 31.6 mn t of coal (both coking & non-coking) in Jun’20, up by 16% against 27.3 mn t in May’20, according to CoalMint’s vessel line-up data.
With ports being shut the country’s coal export numbers for July month are likely to get adversely impacted.
In FY20 (Jul’19-Jun’20), Australia exported about 380.4 mn t of coal against 383.3 mn t in FY19.
Australian coal prices dwindle
—In terms of prices, Australia’s thermal coal prices have suffered a significant blow in last seven months due to ongoing COVID-19 pandemic. The higher grade (6000kcal/kg) thermal coal prices have recorded a fall of 27.6% from Jan’20 to Jul’20 as the same at present stands at $47/t, FoB Newcastle basis.
—Amid weak demand outlook for thermal coal in 2020, companies having mining operations in Australia such as Peabody, Coronado, New Hope, Stanmore Coal, Terracom and Yancoal have reduced their guidance for thermal coal operations and capital expenditure in ongoing year.
—In case of coking coal also, the premium grade coking coal prices of Australia-origin have registered a fall of 19.5% from Jan to Jul’20 and is currently assessed at $111.5/t, FoB Auatralia basis.
Chinese buyers which are key procurers of Australian coking coal are largely refraining from the procurement amid scarcity of limited quotas as well as stringent customs-clearance policies at major coal-handling ports.
Outlook
The outlook for Australian thermal coal prices remains weak for 2020 amid lacklustre demand scenario in its key export destinations, Japan and South Korea. While some price recovery is expected towards the end of the year, it is unlikely to match the levels of 2019.
As steel demand and consumption in Asia-Pacific coking coal markets outside China continues to remain listless due to the ongoing pandemic, no major price recovery is expected before September end.
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