Australia’s thermal coal exports recover from floods, surge 45% in August

After falling sharply to over a two-year low in July, Australian thermal coal export shipments have risen sharply by 45% m-o-m at 16.8 mnt in August 2022, CoalMint’s vessel line-up data reveals.

Shipments to major Asian and European buyers were higher last month amid strong procurement demand.

Deliveries to Japan were the highest, rising by 50% m-o-m to 8.8 mnt, followed by Taiwan and South Korea at 2.6 mnt and 1.6 mnt, respectively.

Export volumes picked up as strong buying appetite compelled authorities to push back the maintenance work at New South Wales (NSW) port of Newcastle and reopened coal loading and shipments.

As a result, Australian Rail Track (ARTC) carried out an unplanned maintenance shutdown during 10-13 September. The next maintenance shutdown is scheduled for 5-7 October.

Trade balancing

*Qty in mnt

Shipments to major countries

Amid the ongoing sanctions on Russian coal, Japanese buyers continued to stick to Australian coal as shipments recorded a whopping 50% rise last month. Japan’s power utilities continued to secure Australian supplies via long term contracts.

Tohoku Electric Power had signed a long-term contract with Glencore at a whopping $375/t for 2022, as against $110/t in 2021.

Shipments to India rose 23% due to usage in the power and sponge iron sector for blending. Several Indian DRI producers were seen blending low-CV Australian coal with South African material in a bid to reduce higher raw material costs.

Shipments to Thailand rose a whopping 312% in August as the country reduced LNG import dependency amid elevated global prices.

Similarly, exports to the Netherlands rose a whopping 561% as it began its winter coal restocking activity amid uncertainty over LNG imports from Russia.

With robust European demand, Australian 6000 kcal/kg NAR  coal prices reached above $400/t last month, which affected shipments to Vietnam that fell 69% last month.

Vietnam compensated the loss in Australian coal imports from Indonesia, with shipments rising sharply by 57% m-o-m in August to 2.4 mnt, CoalMint data shows.

Short-term outlook

Australian thermal coal exports are likely to remain within a tight range in September amid a couple of maintenance shutdowns scheduled for this month and heavy rainfall forecast for New South Wales.

Strong demand from Japan could account for the highest share of imports, followed by Europe. Elevated Australian coal prices, may, however, dent export sentiments to markets such as India.