Australia’s coking coal exports increased by 16% m-o-m in Mar’22 to 13 mnt. The increase in exports is a sign of recovery in supplies.
Australia has experienced more than average rainfall since Sep’21 due to La Nina causing floods in mining regions. Heavy rainfall and floods in Feb resulted in the closure of many coal exporting ports in Australia. However, the situation improved slightly in March resulting in increased supplies from the country during the month.
Other key factors that have pushed Australian coking coal exports are the Russia-Ukraine war and subsequent sanctions on Russia. End-users, especially in Europe and Asia, went into panic-buying Australian coking coal as they feared supply disruptions.
Exports to all major destinations increased: India’s shipments rose by 16% m-o-m, while exports increased by by 21% to Japan and 75% to South Korea.
With sanctions on Russia by the western and a few Asian countries, there would be an annual supply gap in the global steel market of around 25-30 mnt, as Russia is amongst the top five steel exporting countries in the world.
However, this is an opportunity for other steel-exporting countries like India, Japan, and South Korea to fill in the gap created in the absence of Russia. Subsequently, despite high coking coal costs, these countries imported coking coal at elevated prices in March to meet both domestic and export demand, especially in Europe.
In addition, market participants informed that because of increased coking coal prices over the past few months, coking coal stocks with many steel units in these countries was heard to have been reduced and the companies bought costlier coal to replenish their stocks amid uncertain global sentiment, to keep their furnaces running.
Company-wise Jan-Mar’22 exports
Quantity in mnt
If we analyse the company-wise exports, BMA (BHP-Mitsubishi Alliance) exported the largest quantity at 4.6 mnt of coking coal in Mar’22, an increase of 24% m-o-m. The company is also the largest exporter to India, Japan and South Korea.
Jellinbah’s exports were the second-largest at 0.8 mnt followed by Coronado that witnessed a rise of 29% m-o-m.
Exports from Haypoint up 50%
Haypoint port exported 3.9 mnt, up 50% m-o-m. India is the largest receiver of coking coal from this port.
Gladstone port exported 4.2 mnt, up 20% m-o-m, While DBCT port supplied 2.7 mnt of coking coal, a fall of 17% m-o-m .
Port-wise Jan-Mar’22 exports
Quantity in mnt
Outlook
In the short term, Australia’s coking coal exports are set to increase because of high demand for coking coal globally. In addition, the ban on Russian coal exports by the European Union and Japan has increased the dependence on Australian coking coal.
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