Australian thermal coal export shipments rose slightly by 5% m-o-m to 16.8 million tonnes (mnt) in June on account of higher shipments to major European countries. However, scope of a major increase was capped by Australia’s domestic energy crisis and reduced exports to a few Asian countries, CoalMint’s vessel line-up data showed.
Australia is one of the world’s biggest exporters of coal and liquefied natural gas but has been struggling with a power crisis since last month. In the past few weeks, the country has felt the impact of disruptions in domestic coal supplies due to heavy rains, outages at several coal-fired power plants, and soaring global energy prices.
Along with this, global supply chains of coal and LNG have been hit this year, by the ongoing Russia-Ukraine crisis and the sanctions on Russia, resulting in increased demand for Australian coal, especially in the European Union.
The Australian government, in order to tackle the soaring production costs being faced by the domestic power generators, had undertaken a few measures. These include directing domestic gas and coal suppliers in eastern Australia (including New South Wales) to divert major portion of their supplies to the domestic market, in a bid to limit any significant increase in the country’s coal exports.
Australian thermal coal supply dynamics
*Qty in mnt
It can be observed from the above table that while exports to India had taken a hit in June, shipments to South Korea, Vietnam and Netherlands rose significantly.
Elevated prices and higher imports from Russia and Indonesia, on the other hand, resulted in a 46% m-o-m decline in export shipments to India. Power utilities in the country were seen procuring more of Indonesian cargoes due to their stable prices on account of lower Chinese demand.
Australian coal exports to Japan were largely unchanged in June amid sky-high thermal coal price wherein high-CV Australian coal rose above the $400/t-mark.
Shipments to South Korea, and Vietnam gained strength surrounding increasing summer heat. Russian shipments to South Korea have been on a declining trend ever since it condemned the former’s invasion of Ukraine.
Exports to The Netherlands rose sharply for the fourth straight month in June by a whopping 134% as it aggressively eyed ways to replace Russian energy imports. Tight LNG supplies into the country currently, following the partial suspension of the Nord Stream 1 pipeline, is seen raising its coal import demand, going ahead.
Short-term outlook
Australian coal exports in July are likely to be negatively impacted as heavy rainfall has again disrupted coal mining activity in New South Wales and shipments from Newcastle Port. This, coupled with the domestic energy crisis, is also seen limiting its exports.
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