What Does Coking Coal Supply Disruption in Australia Mean to Indian Buyers?

The Coking Coal supply disruption in Australia is likely to hit smaller Indian mills, leaving aside big ones.

This seems to be the most pertinent concern that has arisen as the country is dependent mostly on Australia for Coking Coal supply.

Given the import dependency in India, it could be figured out that the smaller players—like, foundries, ferro alloys–will be affected as they normally maintain less Coking Coal inventories. While, the big players are likely to be insulated from the supply disruption as they usually maintain inventories for 30-40 days period.

Big players, especially steel makers, are likely to have Coking Coal inventories as there were higher imports during Mar’17, the month proceeding the month of occurrence of the cyclone.

Import statistics available with CoalMint Research show that Coking Coal imports into India from Australia in Mar’17 were at 2.58 MnT, which were higher than the imports during the preceding months—Feb and Jan of 2017–from there.

Source: CoalMint Research

Another area of concern in the implied context is the growing Met Coke production in India. Production of Met Coke has increased in the country due to the rising demand. The Coking Coal supply disruption after the cyclone will also negatively impact Indian Met Coke producers.

Source: CoalMint Research 

FORCE MAJURE UPDATE

The major Australian coal miners, which has declared force majeure are: BHP Billiton, Glencore, Jellinbah, Rio Tinto and Peabody Energy.

PORT STATUS UPDATE

Abbot Point Coal Terminal is expected to commence operations on 10 or 11 Apr’17. Communication systems at the terminal have not yet being fully restored. Vessel line ups are now available via the terminal. There are 9 vessels at the anchorage.

Dalrymple Bay Coal Terminal is expected to resume full functioning after around 6 weeks, after the Goonyella railway network is repaired. Currently, vessels scheduled to berth will load coal cargoes, which will be from the port stockpiles prior to the cyclone. There are 33 vessels at the anchorage.

Hay Point Coal Terminal is not yet recovered from the site issues after the cyclone. There are 29 vessels at the anchorage, and the vessels will be waiting there for around 6 week until the Goonyella railway network is repaired. Besides, there are also scheduled shut-downs at the terminal. Berth No. 2 will be closed for maintenance from 7Mar’17 to 14Apr’17, and the maintenance period could also be extended. Berth No. 3 will be closed for maintenance from 19Mar’17 to 17May’17, however, there is a likelihood for the maintenance period to be deferred.

Gladstone Coal Terminal has started operating with loading and unloading functioning as normal.

RG Tanna Coal Terminal is functioning normally after damages to the associated rail lines were fixed.