Australian thermal coal exports drop 10% in CY22; shipments to India plunge nearly 50%

Australian total thermal coal export shipments dropped by 10% y-o-y to 177.05 million tonnes (mnt) in 2022, according to CoalMint’s vessel line-up data.

qty in mnt

Exports to key Asian countries recorded a sharp fall y-o-y, while exports to India dropped 49%, shipments to Taiwan fell by 12% and to South Korea by 27%. This was mainly because Australian coal prices remained elevated throughout the year as shipments were diverted to European countries.

The Russia-Ukraine war and subsequent sanctions on Russian coal compelled EU buyers to import high-CV coal from alternate sources like Australia. This resulted in increased demand for Australian cargoes as well as elevated prices, forcing Asian countries to opt for relatively cheaper Indonesian coal.

In the case of India, demand for 5500 NAR grade coal took a hit but Australian 4600 NAR grade coal found some takers in the last quarter of 2022, especially from the sponge iron sector. This coal has a fixed carbon (FC) content of 42-43% and volatile matter (VM) of 27-28%. One tonne of sponge iron requires about 1.15 t of this grade of coal. However, it is being used in different blends with South African and domestic coal.

In addition, the fall in Australian thermal coal exports can be attributed to heavy floods and rainfall in the middle of the year leading to the Newcastle Port remaining closed for over two weeks. This was followed by the slower pace of deliveries due to landslides in the Blue Mountain line which connects the western coalfields of New South Wales to Sydney and the ports of Newcastle and Kembla.

It was only in the case of Japan that Australian export shipments picked up by 5% y-o-y. Amid sanctions on Russian coal, Japanese buyers continued to stick to Australian coal.

 Outlook

Australian thermal coal exports may rise in the coming months amid expectations of a harsh winter ahead. Also, China has recently permitted a few companies to resume coal imports from Australia. With sanctions on Russian coal by the western countries to continue, Australian coal exports may get a boost in 2023.