Australia forecasts longer La Nina wet weather period

Market: Agriculture, Coal, Coking coal, Metals, Natural gas
16/02/22

Australia's Bureau of Meteorology (BoM) forecasts the La Nina weather pattern bringing wetter weather to north and east Australia will extend through April, increasing the potential for disruptions to the coal, iron ore and LNG sectors.

The La Nina pattern has peaked, according to the BoM, but its influence will continue into mid-autumn that runs from March until the end of May in Australia. The BoM previously expected the effect of the La Nina to pass by the end of February but wetter than average weather persists across the east and north of the country.

The increased rainfall is linked to the La Nina and to a strengthening of the Madden-Julian Oscillation (MJO) over the Indian Ocean over the past week. The BoM expects the MJO to move eastwards into the Australian maritime continent over the next week, which traditionally increases rainfall and cloudiness across north Australia.

A wetter than normal wet season, which runs from November to April, in Queensland, New South Wales (NSW) and Western Australia (WA) could lead to further flooding that may disrupt coal mining and rail transport, as well as onshore gas production.

Heavy rain in NSW and Queensland in November caused localised flooding in the coal fields in the Hunter and Gunnedah basins, as well as near the ports of Gladstone, Hay Point and Dalrymple Bay. This heavy rain and storms associated with ex-tropical cyclone Seth have prompted Australian rail firm Aurizon to cut its coal haulage guidance to 202mn t from 212mn t for the 2021-22 year to 30 June.

A La Nina pattern is often associated with a longer and more disruptive cyclone season, particularly in Queensland.

Queensland's coal ports of Abbot Point, Dalrymple Bay and Hay Point, as well as the coal and LNG port of Gladstone, are all within the cyclone-prone region. Each of these ports have had to close and order vessels out to sea in previous years because of cyclones. The state's rail network is also prone to damage and disruption by cyclones and flooding.

Elevated cyclone activity in northern WA could disrupt exports the nation's major iron ore export hubs and significant LNG and petroleum export facilities. Cyclone Veronica, which hit the WA coast in March 2019, reduced iron ore shipments for a couple of months and forced most major producers to cut their production guidance.

Cyclones also force Australia's LNG operations in WA and the Northern Territory to suspend operations if they are within range.

By Jo Clarke

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