Australia’s thermal coal export shipments fall 24% in September amid record-high prices

Australia’s thermal coal exports, after rebounding in August from July’s worst-hit floods, fell sharply by 24% m-o-m to 12.8 million tonnes (mnt)  in September, CoalMint vessel line-up data revealed.

The fall in exports came as the 6000 kcal/kg NAR grade prices hit a record-high of $450/t last month. An unplanned maintenance shutdown during 10-13 September, 2022 and disruption in coal transportation due to the wet weather also contributed to the fall in exports in September.

Meanwhile, strong winter restocking demand during August had compelled authorities to push the maintenance work at the Port of Newcastle in New South Wales (NSW) by a month to September. Shipments to major Asian countries marked a weaker trend especially to Japan, Taiwan, and South Korea.

Trade flow

*Qty in mnt

Shipments to major countries

Volatile Australian coal prices deterred spot booking from Japan in September. However, given the premium high-CV coal, most favourable for Japanese utilities, shipments from long-term contracts continued.

Tohoku Electric Power had signed a long-term contract with Glencore at a record $395/mt FOB for October 2022-September 2023, as against $110/t in 2021.

Shipments to Taiwan and South Korea and several other parts of Asia fell by 21% and 36% respectively amid easing summer temperature last month due to the La Nina effect.

Exports to India, however, rose by 37% with strong demand for cheaper low-CV Carmichael coal for blending in sponge iron plants.

Interestingly, there were no shipments to the Netherlands last month. The latter instead compensated the fall in coal imports from Australia with Indonesian coal, that rose by a whopping 300% m-o-m in September, CoalMint’s vessel tracking data showed.

Outlook

Australian thermal coal exports are likely to remain within a tight range in October for two reasons. One is the reduction in coal demand in Europe which is sufficiently stocked in inventory. Two, supplies from Australia are getting hampered due to heavy rains. Shipments to Asia are seen higher amid winter restocking demand.