Australia’s thermal coal exports, which had fallen by 4% m-o-m in January, and by 7% in February had further recorded a drop of 20.4% in Mar’21. It stood at 13.1 mn t in Mar’21 against 16.4 mn t in Feb’21, CoalMint’s vessel line up data revealed.
While Australian thermal coal exports to key destinations like South Korea, Japan, Taiwan and India recorded a fall of 12%, 28% 16% and 23% respectively, it was only Vietnam that recorded a surge of 88% m-o-m basis in March.
How weather played havoc on Australian coal supplies?
Heavy rains along Australia’s east coast over several days in March caused the worst flooding there resulting which the Hunter Valley Network (HVN) that carried coal from mines to Newscastle port was shut for few days. Hunter Valley rail line serves mines run by BHP Group Ltd, Glencore PLC, New Hope Corp Ltd, Whitehaven Coal, and Yancoal Australia Ltd, among others.
In addition to this, the Newcastle port, which last year shipped 158 mn t of coal, also announced closure of its second shiploader for two weeks starting 19 March, impacting coal exports from the port.
Reputed miners like Glencore reduced operations at some of its sites whereas Yancoal suspended operations at its Mount Thorley Warkworth and Stratford Duralie mines.
Key importers opt for alternates?
The key importers of Australian coal, especially South Korea opted for sourcing of coal from other-origins like Indonesia and Russia. Lowered nuclear availability due to outages boosted the thermal power generation in South Korea last month, compelling the country to source other-origin coal.
In case of Japan, drop in LNG prices and reduced power demand compensated for disruption in Australian thermal coal supplies. The price of spot LNG arriving into Japan, slipped from $15.5 per mmBtu in Jan’21 and $16.3 per mmBtu in Feb’21, to $9.3 per mmBtu during March.
India increased its imports of Australian thermal coal, especially since Oct’20, as Australian thermal coal became cheaper amid informal ban by China on it. However, in March cement buyers moved to the sidelines and opted for cheaper domestic coal.
Vietnam that has become a key importer of Australian thermal coal when the latter’s prices corrected last year, saw an increased imports in March due to containment of COVID cases and revival of industrial activities.
While the country’s electricity generation rose to 20.7TWh in March, up from 15.1TWh in Feb’21, cement production in March was 8.3mn t, up from 5.6mn t in February, according to the general statistics.
Outlook
With Newcastle port resuming full operations in April and freights correcting, Australian thermal coal exports are expected to rise against previous month especially from South Korea and India.
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