Australian coking coal exports rise marginally despite sharp drop in prices

Australian coking coal exports were recorded at 14.4 mnt in June, up by 6% m-o-m basis. Although Australian coking coal prices (monthly average) in June fell by 26% m-o-m, subdued demand from its key buyers like India, Japan, and South Korea limited any significant rise in country’s exports.

Traditional buyers – India and Japan – has only recorded a marginal rise of 2% m-o-m in June, while exports to South Korea have come down by 15%.

Although Indian government had announced export duty on steel in last week of May, resulting in Indian buyers moving to the sidelines for coking coal inquires, any significant effect in Australia’s June export numbers was not seen as the shipments were already booked in first three weeks of May for June laycans.

For Japan and South Korea, China is a key steel exporting destination and steel demand in China didn’t pick up in June post-lifting of Covid restrictions. In fact, the inflationary pressure and months long lockdown in the country have dampened production for cars, appliances, and even the construction activities there, thus impacting South Korea’s and Japan’s steel production and subsequently their demand for coking coal from Australia.

Interestingly, Australian coking coal exports to Vietnam and the Netherlands rose by 34% and 8% respectively. However, in absolute terms, exports to both the countries stand to be very less at 1.97 mnt and 0.88 mnt.

Port wise coking coal

Qty in mnt

Shipments from Gladstone Port increased by 25% and from DBCT Port rose by 12%.

With regards to company-wise exports from Gladstone Port, BMA was the largest exporter followed by Jellinbah and Coronado. BMA is the sole exporter of coking coal from Haypoint Port.

Company wise coking coal export

Qty in mnt

When we look at company exports, BMA (BHP-Mitsubishi Alliance) exported the highest quantity of coking coal in June at 5.35 mnt, an increase of 8% m-o-m. The company is the largest exporter to India, Japan, and South Korea.

Jellinbah had the second-largest exports at 0.93 mnt, followed by Coronado, at 0.77 mnt.

Outlook

It is expected that Australia coking coal exports in the upcoming month will fall as global steel demand has turned quite sluggish forcing them to make only steel-based purchases.