Australia, the world’s largest coking coal exporter, has recorded a signficiant decline in exports in Feb’22. Exports fell to an 18-month low of 11.2 mnt, Coalmint’s vessel line-up data reveals. This shows that exports have fallen lower than 12.8 mnt recorded in Aug’20 when the Covid outbreak had disrupted trade.
Interestingly, coking coal imports by India declined 15% in Feb, while Australia’s exports to two other key countries, Japan and South Korea, increased by more than 40%.
Also, China that was a major export destination for Australia in Aug’20 has stopped exporting Australian coal since late-2020. Nevertheless, Australian coking coal exports never fell to levels witnessed in Feb as exports to ex-China destinations like India, Japan, South Korea and Vietnam had plugged the China gap for Australian suppliers.
Australia’s coking coal exports fell by 10% m-o-m in Feb, while on a y-o-y basis exports decreased by 12%.
Factors triggering drop in exports
The significant fall in Australian coking coal exports can be attributed to the signficaint rally in prices due to supply disruptions.
Australian premium grade coking coal prices rose by 10% m-o-m in Feb and a whopping 253% y-o-y.
The country is experiencing more than average rainfall since Sep’21 due to La Nina causing flooding in mining regions. Heavy rainfall and floods in Feb resulted in the closure of many coal exporting ports in Australia.
With escalation in prices, major steel mills across the globe turned cautious about purchases.
On a m-o-m basis, imports by India, Japan and South Korea have fallen, while exports to the Netherlands and Vietnam rose by 66% and 32% respectively.
Exports from Hay Point fell 30% in Feb’22
The Hay Point Port exported 2.63 mnt of coking coal, down 30% m-o-m. The port is owned and operated by the BHP Mitsubishi Alliance (BMA).
Exports from the Port of Gladstone remained unchanged, while from DBCT exports increased 6% on the month.
Company-wise exports
BMA’s exports fell 30% m-o-m in Feb to 3.73 mnt. However, exports by Coronado, Anglo American and Peak Downs increased by 15%, 8% and 93% respectively.
Outlook
The Russia-Ukraine war and subsequent sanctions on Russia resulted in increased demand for Australian coal, especially from the EU, resulting in a dramatic rise in coking coal prices. Australian exports are likely to remain rangebound in March.
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