Australia to export more coking coal in 2019
The Australian government's commodity forecaster the Office of the Chief Economist (OCE) has revised up its Australian metallurgical coal export expectation for 2019 by 4mn t, as Queensland ports increase throughput despite maintenance issues.
The OCE projects Australian coking coal exports to rise to reach 185mn t in 2019, compared with its June forecast of 181mn t. It maintained its forecast for 2020 and 2021 at 195mn t and 199mn t, respectively, in its September resources and energy quarterly (REQ) released today.
The OCE increased its expectation for world trade in coking coal to 344mn t in 2019 and 350mn t in 2020 from 334mn t and 338mn t, respectively, in its previous forecast, despite maintaining or slightly cutting its expectations for exports from the US, Russia, Canada, Mozambique and Mongolia.
The OCE has revised down its 2019 average spot price forecasts to $186/t from $198/t in its June REQ because prices declined more rapidly than expected, offsetting the impact of a downward revision of the Australian dollar against the US dollar. The OCE expects coking coal prices to remain under pressure because of Chinese import restrictions and a well-supplied seaborne market, as Australia and Russia increase exports.
Queensland coal shipments were below average for the first few months of this year because of a series of maintenance issues and bad weather.
These issues have largely been resolved with shipments largely above average since June, despite ongoing maintenance at the BHP Mitsubishi Alliance-operated port of Hay Point.
Around 13mn t of new capacity next year will come on line from three Australian coking coal projects — the restart of Japanese firm Sojitz's 6mn t/yr Gregory Crinum mine, the start of Australian firm Fitzroy Resources' 3mn t/yr Ironbark No.1 mine and the start of the 4mn t/yr stage one of Australian firm Pembroke Resources' Olive Downs South mine.
Peabody also hopes to produce 2mn short tonnes in 2020 from reopening its North Goonyella mine, which has been closed since September 2018 because high gas levels and a fire.
All this new capacity will put further pressure on prices in 2020, assuming all the projects begin production on time.
Beyond these immediate projects, the OCE notes that the long-term project pipeline is limited, with a growing reluctance to commit to new projects amid community opposition and a problematic lending environment for coal.
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Asia-Pacific coking coal: Fob trades at $260/t
Asia-Pacific coking coal: Fob trades at $260/t
Singapore, 2 July (Argus) — Coking coal prices on a fob Australia basis jumped after an August Goonyella deal emerged higher on traders' position-taking, against a background of anticipated supply tightness. The Argus Australian premium low-volatile (PLV) hard coking coal price rose by $22.60/t to $259.60/t on a fob basis, while the tier-two hard coking coal price rose by $18.50/t to $225.50/t fob Australia. Trading returned to the first-tier fob Australia market today after more than a week of subdued activity. A major producer sold a 40,000t Goonyella cargo with 1-10 August laycan to a trading firm at $260/t fob Australia on the Globalcoal trading platform today. The trade was in line with market expectations of tightening supply, providing a lift to coking coal prices. The suspension of operations at Anglo American's Grosvenor mine in Queensland has prompted a sharp change in market sentiment, sources noted. Sentiment had been bearish over the previous week, before taking a bullish turn when the news of the closure broke over the weekend, an India-based trader said. Several sources said the increase was on the high side, as there has been limited change in recent market fundamentals to warrant such a rise. Recent events made it challenging to gauge where the market price should be, a Singapore-based trader said, preferring to adopt a wait-and-see approach towards near-term market direction. But users in the region were largely sceptical on whether the uptrend can be sustained, suggesting that demand remained muted their end. "We don't have any urgent requirement at this point and will wait for an update from the miner before acting," an Asian steel mill source said. Several steel mill sources also pointed out that they have accounted for limited supply from the miner in August-September because of a scheduled long wall move. At least three steel mill sources expected the miner to have sufficient inventory to meet the commitments for scheduled July-loading cargoes. A bid for a 75,000t cargo of premium mid-volatile hard coking coal for 1-10 September was made at $255/t fob Australia on Globalcoal today, increasing from $250/t fob earlier in the session. It did not attract a counteroffer. In the pulverised coal injection (PCI) segment, a 40,000t cargo of Australian South Walker Creek PCI for 27 July-5 August loading was sold at $195/t fob Australia to a Brazilian steel mill on 1 July after the assessment timestamp of 17:30 Singapore time. Premium hard coking coal prices to India rose by $22.25/t to $275.35/t on a cfr basis, while second-tier prices rose by $18.60/t to $241.70/t cfr east coast India. The PLV hard coking coal price to China was unchanged at $247/t on a cfr basis today, while the second-tier price was flat at $217/t cfr north China. Market participants noted that the trade seemed to have minimal impact on the Chinese market. An international trader suggested that domestic coking coal prices held steady because of Russian and Mongolian coal availability. The link between the seaborne and domestic market has been disjointed for a while now, another trading source said, even though fob prices are expected to climb because of tightening seaborne supply. "At the current fob Australia price levels, it is difficult for Chinese buyers to consider buying imported coal since other origins of seaborne prime coals are also expected to increase at a relativity to the fob Australia price," a Chinese buyer said. Fob Australia rationale The fob Australia PLV index was based on an average of the day's deals and surveys, both weighted at 50pc in the index calculation. A 40,000t cargo of Goonyella with an August laycan traded at $260/t fob Australia and was normalised flat. The market survey was at $255-260/t and averaged $259.17/t. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fire shuts Anglo American’s Australian coking coal mine
Fire shuts Anglo American’s Australian coking coal mine
Sydney, 1 July (Argus) — UK-South African mining firm Anglo American has closed its 5mn t/yr Grosvenor coking coal mine in the Bowen basin region of Australia's Queensland, after a fire broke out underground. The methane gas ignition occurred on 29 June and it is likely to take several months before the mine can restart given the damage underground, according to Anglo American. Independent regulator Resources, Safety and Health Queensland said it was assisting the firm to safely seal the mine on 1 July. Grosvenor was expected to deliver 1.2mn t of coal in July-December, down from 2.3mn t in January-June, because of a planned longwall move in the second half of 2024. Anglo American's steelmaking coal business was budgeted to produce 15mn-17mn t of coking coal in 2024 and the firm will update this guidance as more information becomes available. Anglo American is looking to exit its coal mining operations in Australia , after rejecting a takeover offer from Australian mining firm BHP. It has struggled to manage the build-up of methane from its Queensland mines over the past few years. Operations at Australia's Moranbah North mine was closed from March-May 2022, after a fatal accident raised safety concerns. The producer also stalled operations at the Grosvenor mine in May 2020 because of gas ignition issues. Argus assessed the premium hard low-volatile coking coal price at $234/t fob Australia on 28 June, down from a year-to-date high of $336.25/t on 12 January. By Jo Clarke Australian metallurgical coal prices ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Accident disrupts coal deliveries to Australian port
Accident disrupts coal deliveries to Australian port
Shanghai, 28 June (Argus) — An accident on the Blackwater railway system has disrupted coal exports from Australia's 102mn t/yr Gladstone port in Queensland, which may take some time to resolve. The accident occurred on the main Blackwater rail line that connects coking and thermal coal mines in the lower and middle Bowen basin into Gladstone, including the Curragh, Jellinbah East, Blackwater and Kestrel coking coal mines, as well as the Rolleston and Minerva thermal coal mines. A truck collided with a car at Raglan — 50km north of Gladstone — at approximately 3am Australian Eastern Standard Time (5pm GMT) on 28 June, bringing down overhead power lines and coming to a stop across the railway track. "The accident is affecting coal services on the Blackwater system, together with freight and passenger trains which use this rail corridor," a spokesperson at Queensland Coal Network operator Aurizon told Argus . Recovery work is under way and the repair process is "expected to take a number of days" to restore the line, according to Aurizon. It is unclear how long repair works may take, although it is likely to be less than a week, an Australia-based source suggested. "It's still a bit early to say [what the impact will be]," another source said. "I'd guess they will try and get one line back up and running at a slower throughput rate while other lines/electrics are fixed." The Moura rail system — which also delivers coal into Gladstone — continues to operate, delivering coal from the lower grade coking coal and pulverised coal injection (PCI) grade mines of Dawson and Baralaba. The Gladstone RG Tanna coal terminal has a vessel queue of 12 as of 25 June, from 13 on 21 May and 23 on 23 April, although this may climb if the derailment disrupts coal deliveries for more than a few days. Hard coking coal typically accounts for around a third of Gladstone's total exports, with lower-grade coking coal and thermal coal each accounting for a third. Tighter supplies ahead The accident is expected to further tighten supplies, especially with upcoming rail closures and maintenance on some of Aurizon's coal-hauling networks in July-August. The closure will involve one planned 96-hour maintenance closure on the Blackwater system and a 84-hour planned closure of the Gregory branch of the rail system. The rail operator will also carry out bridge renewal work, with one track and a two-track bridge closed for two weeks, based on plans announced last year. "It is acknowledged that [this] will result in some capacity constraints during that period," an Aurizon spokesperson said on 7 June. Argus last assessed the premium hard coking coal price at $237/t fob Australia on 27 June, down from $249.50/t on 3 June. The fob Australia low-volatile PCI price was assessed at $186.85/t fob Australia on 27 June, up from $169.15/t on 3 June. The price spread between fob Australia premium low-volatile coking coal and low-volatile PCI has tightened gradually in the last six months, from $143.35/t on 2 January to $50.15/t on 27 June. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US House panel advances waterways’ projects bill
US House panel advances waterways’ projects bill
Houston, 27 June (Argus) — A Congressional committee on Wednesday advanced a bill to authorize a bundle of US port and river infrastructure projects for the US Army Corps of Engineers (Corps). The Water Resources Development Act (WRDA) biennially authorizes projects handled by the Corps' civil works program aimed at improving shipping operations at the nation's ports and harbors, and along the inland waterway system. The traditionally bipartisan legislation also approves flood and storm programs, and work on other aspects of water resources infrastructure. The House of Representatives' Transportation and Infrastructure Committee on Wednesday passed the bill by a 61-2 vote. The Senate Committee on Environmental and Public Works passed its own version of the bill on 22 May by a 19-0 vote. Neither the full Senate nor House have yet voted on the bills, which will need a conference committee to sort out different versions. A key difference is that the House bill did not include an adjustment to the cost-sharing structure for lock and dam construction and major rehabilitation projects. The Senate measure adjusted the funding mechanism so that 75pc of costs would be paid for by the US Treasury Department's general fund, with the rest coming from the Inland Waterways Trust Fund. The 2022 version of the bill made permanent an increase to 65pc from the general fund and 35pc from the trust fund, which is funded by a barge diesel fuel tax. The House committee's decision not to include the funding change drew disappointment from shipping interests. The Waterways Council was "disappointed that the House did not include a provision to modernize the inland waterways system", but was hopeful that conference negotiations would result in its inclusion, Tracy Zea, chief executive of the group, said. The latest House version of the bill authorizes 12 projects and 160 new feasibility studies. Among the projects receiving approval were modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland. The federal government would pay $47.9mn towards an estimate $63.9mn project to widen the channel, which would help meet future demand for capacity within the Port of Baltimore. That would include increased container volume at the Seagirt Marine Terminal. The project was in the works before the 26 March collapse of the Francis Scott Key Bridge temporarily diverted freight from Seagirt and many other port terminals. The committee also authorized $314.25mn towards a resiliency study of the Gulf Intracoastal Waterway. The study would consider hurricane and storm damage and identify ways to improve navigation, reduce the maintenance requirements, and provide resiliency. The waterway connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. The House version of the bill also includes provisions to strengthen flood control, wastewater, and stormwater infrastructure. "Critically, WRDA 2024 will help communities increase resiliency in the face of climate change," representative Rick Larsen (D-WA) said. By Abby Caplan and Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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