Newcastle coal exports rebound despite China ban

Market: Coal, Coking coal
06/01/21

Newcastle coal shipments rebounded in December, despite no exports flagged as heading to China from the Australian port and one of the two shiploaders at the Newcastle Coal Infrastructure (NCIG) terminal remaining out of action.

The two Port Waratah Coal Services' (PWCS) terminals at Newcastle shipped 10.96mn t in December, up from 7.46mn t in November and 10.78mn t in December 2019, according to PWCS data. December was a record-high shipping month for PWCS, as it worked to compensate for lost shipments out of NCIG because of the ongoing closure of one of the two shiploaders at the terminal. There is still no confirmed restart date for the second NCIG shiploader.

Total shipments from Newcastle of around 14.4mn t rose from 11.35mn t in November but were down from 15.48mn t in December 2019, according to initial shipping data collated by Argus. Shipments to China fell to zero from around 430,000t in November and 4.13mn t in December 2019. The December figures include 3.3mn t of exports that have an unconfirmed destination, but only 150,000t of the initial 1.6mn t of November shipments with unconfirmed destinations remain and none of the resolved November shipments ended up in China.

PWCS shipped just 9pc of its coal exports to China in 2020, according to the firm. It shipped 17.5pc to China in 2019, according to PWCS data.

Beijing's relationship with Canberra has worsened since China banned imports of Australian coal in October. Australian coal mining firms had hoped that a new quota would open in 2021 allowing more exports to China but this was not reflected in the shipping data out of Newcastle or the Queensland coal port of Gladstone.

The ship queue at Newcastle rose to a high for 2020 of 30 in December, up from 28 a month earlier, as demand from other key nations offset the decline in shipments to China. Japanese buyers had a particularly strong December, although exports to Japan were down in 2020 compared with 2019, as they were for exports to South Korea and Taiwan. The decline in these key markets and China was partially offset by increased shipments to India, Pakistan and southeast Asia in 2020 compared with 2019.

Argus last assessed high-grade Australian thermal coal at $81.44/t fob Newcastle for NAR 6,000 kcal/kg on 31 December, up from $70.33/t on 4 December and a low of $46.18/t on 4 September. It assessed lower-grade coal at $52.99/t fob Newcastle for NAR 5,500 kcal/kg on 31 December, up from $46.89/t on 4 December and $35.04/t on 4 September.

The heat-adjusted premium on a NAR 6,000 basis for higher-grade thermal coal increased to $23.63/t on 31 December from $19.18/t on 4 December and $8.65/t at the end of August.

Shipments of semi-soft coking coal accounted for around 12pc of PWCS' total. The semi-soft mid-volatile coking coal price had been stable at around $71.20/t for most of December, according to Argus' assessment.

By Jo Clarke

Newcastle's coal shipments					mn t
Period	China	Japan	South Korea	Taiwan	Total

Dec '20		6.50	2.15	1.33	14.40
Nov ' 20	0.43	5.13	2.20	0.95	11.35
Dec '19	4.13	5.75	2.93	1.48	15.48
Total 2020	27.55	65.43	22.95	20.95	160.03
Total 2019	38.18	66.30	23.33	22.00	165.60
Source: Initial shipping data collated by Argus

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