Australia’s thermal coal export shipments have been declining since the last four months and have continued to do so in November as these fell 11% m-o-m to 15.2 million tonnes (mn t), CoalMint data reveals. The country’s exports to India registered a 50% m-o-m fall to 1.02 mn t.
The decline in shipments to India came in the backdrop of improving domestic production in the country and anticipation of further corrections in imported prices.
After a constrained supply scenario over the last few months, output from Coal India Ltd (CIL) and its subsidiaries rose by 4% m-o-m to 53.8 mn t in Nov’21. Offerings also witnessed an exponential growth at 19.47 mn t in Nov’21 against 1.62 mn t in Oct’21 and 5.08 mn t in Sep’21.
Several cement manufacturers which imported Australian coal were even heard opting for South African coal amid a bid-offer mismatch for Australian coal cargoes.
In tandem with global coal prices, Australian 5500 NAR prices had witnessed a considerable correction last month, falling by an average of 20% m-o-m to $108/t, FOB basis.
Supply disruptions dented total exports
Amid supply constraints in Australia last month due to ongoing rainy season, exports were hampered.
Severe storms also affected shipments as vessels ordered out to sea were disrupted amid strong winds and heavy swells, while flooding affected deliveries to the port.
Several deliveries at the beginning of the month also were disrupted by rail maintenance and climate change protestors blocking rain lines in the first half of the month.
Exports to Japan and South Korea rise on winter demand
Interestingly, in case of Japan and South Korea, Australian export shipments saw a decent rise of 9% and 23% m-o-m, respectively.
Strong winter restocking activity last month with the correction in Australian coal prices, boosted exports to Japan to 7.92 mn t.
South Korea also joined the race with a surge up to 2.45 mn t as natural gas supply remained constrained amid higher prices and increased demand from Europe.
Short-term outlook
With the declining trajectory of global coal prices and peak winter setting in in various parts of north-east Asia, demand for Australian coal would see a rise. However, its supplies are expected to be constrained due to stormy weather with strong winds and above average rainfall forecast, that would keep the country’s thermal coal exports in tight range.
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