Australian thermal coal export shipments fell sharply to their 2-year lows of 11.6 mnt in July 2022, also down by 31% m-o-m, CoalMint’s vessel line-up data reveals.
Thermal coal exports from the country had declined by 11 mnt in May, 2020 during the peak months of Covid-19 outbreak across the globe.
The sharp fall in exports came as heavy floods and rainfall last month led to the Newcastle Port remaining closed for over two weeks, following slower pace of deliveries due to landslides in the Blue Mountain line which connects the western coal fields of New South Wales to Sydney and the ports of Newcastle and Port Kembla.
Shipments to major destinations recorded a sharp fall including European countries, Japan, and other Asian markets.
Country-wise exports
Trade balancing
*Qty in mnt
Exports to India, however, recorded a 47% rise with majority of vessels being for Adani Coal Mines.
Several southern-India-based sponge iron manufacturers have resorted to blending low-CV Australian coal amid higher pfrices of South African coal and limited availability of the latter.
These units are heard to be blending 4600 NAR grade Australian coal in a ratio of 30:70 (4600 NAR Australian:5500 NAR South African) to produce one tonne of sponge iron.
Shipments to Malaysia also recorded a 54% rise as their average power demand continues remain higher with the resumption in economic activities and re-opening of international borders for tourism purposes.
Decline in shipments to Europe, Japan
Despite strong demand, Australian thermal coal shipments to European countries fell sharply last month amid disruption arising from heavy rains.
Australian coal exports to Netherlands dropped by a whopping 84% last month. Much of the shipments to the country were being made from South Africa and the US.
Shipments to Japan also declined by 18%. However, with strong demand for non-Russian supplies, the annual contract for Australian thermal coal by Glencore and Japan’s Tohoku Electric Power was fixed at a whopping $375/t for 2022.
The contract price was at $110/t in 2021 and $69/t in 2020 — levels at which Japanese utilities make bulk purchases from Australia.
Elevated Australian coal prices weighed on their shipments to major Asian buyers such as South Korea, Taiwan, Vietnam, and Thailand.
Short-term outlook
Australian coal exports in July are likely to be higher as deliveries have been restored at Newcastle Port. With strong demand from Europe amid its embargo on Russian energy imports, Australia remains a key destination. However, its elevated prices may weigh on its shipments to a few Asian countries.
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