Tight domestic supply and a dearth of imported coal stock at ports have compelled Indian buyers to procure Australian coal even at higher prices as export shipments to India rose sharply by 77% m-o-m to 1.5 mnt in March, 2022, CoalMint’s vessel line-up data showed.
The rise in Australian shipments comes amid reduced coal dispatches by Coal India Ltd to the non-power sector which has resulted in the majority of these units working under minimum capacity and relying on imported coal.
Several cement manufacturers which had shifted back to using pet coke were also heard purchasing Australian coal amid elevated pet coke prices.
Overall, however, Australian shipments fell marginally by 2% m-o-m to 13.9 mnt in March, 2022 with shipments to major Asian countries recording a m-o-m fall, while those to European countries witnessed a remarkable rise amid sanctions on Russia.
Logistic woes
Logistics disruption and escalated prices last month also resulted in major volatility in exports from Australia as coal output was hit by floods in New South Wales and Queensland, with the situation still under pressure.
Coal stock at key ports were at reasonably low levels, while vessel queues remained long, waiting to load for deliveries.
Prices of 5500 NAR averaged $270/t, FOB, up 72% m-o-m in March 2022 as sanctions on Russia compelled European buyers to seek Australian cargoes. Notably, Australian thermal coal prices were trading at a whopping rise of 373% on a y-o-y basis.
Exports to major Asian countries drop
Australian thermal coal exports to Japan fell by 14% m-o-m to 6.1 mnt in March 2022, while those to South Korea fell by 19% m-o-m to 1.9 mnt.
The fall in shipments was also triggered by the volatility in global coal markets which, in turn, pushed up Australian coal prices and prompted buyers to take a backseat.
Shipments to Taiwan, however, rose by 81% m-o-m to 2.3 mnt as it joined in with international sanctions against Russia. The same for Vietnam rose by 8% m-o-m to 0.5 mnt last month, CoalMint data showed.
Shipments to Netherlands surge
In a bid to ensure energy security amidst disrupted supply from Russia, going ahead, Australian coal shipments to the Netherlands registered a 235% m-o-m rise to 0.2 mnt in March 2022, CoalMint data showed.
Australian coal demand in most parts of Europe is likely to remain high as gas supply remains restricted. Germany has asked to extend the life of several coal or nuclear plants to cut reliance on Russian gas.
Short-term outlook
With renewed sanctions on Russia, strong demand for thermal coal is likely to keep Australian export shipments higher.
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