Australia’s coking coal exports drop to 2-year low in Jul’22

Australian coking coal shipments fell to the lowest level in the last two years at 11.3 million tonnes (mnt) in July. Exports fell by 21% on monthly basis.

Factors behind dramatic fall  

The key reason that can be attributed to the dramatic fall in exports are floods in mining regions of Australia that had not only disrupted production but also led to the closure of key rail line carrying coal to port from various mines in Queensland.

Adding to the woes was the sudden drop in demand for coking coal from key buying destinations, particularly India that had imposed export duty on steel in the last week of May this year. Also demand from Europe took a backseat in the past two months amid inflationary pressure and sufficient stocks at mills.

Global crude steel production (of 64 countries) fell by 18% y-o-y at 947.5 mnt in the first half of 2022. This drop can be attributed to the Russia-Ukraine conflict, elevated coking coal prices and China’s efforts to curb steel output in line with its goal to control carbon emissions.

Port-wise coking coal exports

Qty in mnt

Gladstone Port recorded the highest shipments but was still lower by 0.82 mnt from the previous month. Exports from Haypoint and Abbot point dropped 33% and 27% m-o-m.

BMA was the largest exporter from Gladstone Port followed by Anglo American and Jellinbah. While BMA is the only company that exported coking coal from Haypoint Port, South 32 used only Port Kemble.

Company-wise coking coal exports

Qty in mnt

The largest coking coal exporter BMA recorded shipments at 3.49 mnt, down 35% m-o-m. The drop was largely due to disruption in the Hunter Valley rail line that affected supply. While exports by Anglo American Marketing and German Creek were up by 60% and 23% m-o-m respectively. Coronado’s exports fell 30% in July.

Outlook

Australia’s exports may rise in August as supplies from the mines have been restored and demand from India has also picked up. This coupled with sanctions on Russia by Europe that has already come into effect will also lead to an increase in its demand from all regions.