Weak demand sees Peabody suspend Australian coal mine

Spanish Market: Coal, Coking coal
25/05/20

US energy firm Peabody will close its 2.5mn t/yr Wambo underground thermal and semi-soft coking coal mine in New South Wales (NSW), Australia to align production with weaker demand and offset the effect of lower coal prices.

The firm will stop coal production from the underground mine for 59 days from 19 June, after high-grade thermal coal and semi-soft coking coal prices fell to four-year lows amid Covid-19 related falls in seaborne demand. It will continue some development work that could see the mine restart in mid-August.

Peabody follows Australian independent Terracom in cutting production in response to market conditions. Initial port data suggests that other producers may be quietly cutting production at the margins in response to weaker demand and lower prices. Several Australian thermal coal mining firms are making a loss at current prices and non-premium metallurgical coal mining firms are also struggling, with Australian coal mining firm AMCI cutting production at the 3.5mn t/yr Carborough Downs mine.

Argus last assessed the high-grade Australian thermal coal price at $52.04/t fob Newcastle for 6,000 kcal/kg NAR on 22 May, down from $67.58/t at the start of April but up from $48.63/t on 7 May that was a low not seen since May 2016. It assessed the lower grade coal price at $42.99/t fob Newcastle for 5,500 kcal/kg NAR on 22 May, down from $53.18/t at the start of April but up from the four-year low of $38.48/t on 7 May. Argus last assessed the semi-soft mid-volatile coking coal price at $67.50/t fob Australia on 22 May, down from $100/t at the start of April and a record low since Argus started publishing the data in December 2017.

The Wambo underground mine, which is in the Hunter valley region of NSW, sold 2.2mn t of semi-soft coking and thermal coal in 2019. The closure will not affect the 3.5mn t/yr Wambo open-cut mine, which is combining with Switzerland-based mining firm Glencore's United mine to form the 6mn t/yr United Wambo joint venture. The United Wambo joint venture was formally created in October-December 2019 following government approval and joint production is due to start late this year. The joint venture will see operating costs temporarily rise in 2020 during the transition to the new structure, as well as incurring around $60mn in capital costs in 2020, at a time when most mining firms are focused on reducing costs to maximise margins.

By Jo Clarke

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09/04/25

Peabody reviews Anglo's Australian coal assets buyout

Sydney, 9 April (Argus) — US coal producer Peabody Energy is reviewing its decision to buy UK-South African mining firm Anglo American's coking coal assets in Australia, following a blast at Anglo's Moranbah North mine, the company said today. Peabody Energy agreed to buy four of Anglo American's mines — Moranbah North, Grosvenor, Aquila, and Capcoal — in a $3.8bn deal signed in November 2024 . The Moranbah North blast could trigger an adverse event clause in the acquisition contract, allowing Peabody to withdraw from the deal at a minimal cost, market participants told Argus on 9 April. This has not been confirmed by Peabody. The company said it remains in conversation with Anglo American to better understand the impacts of the event. Two of Anglo American's Australian coking coal mines, Grosvenor and Moranbah North, are currently non-operational because of safety issues. Resources Safety and Health Queensland (RSHQ) — one of Australia's mining regulators — shut Moranbah North after a suspected carbon monoxide explosion on 31 March. Anglo American declared force majeure on coking coal from Moranbah North on 3 April in a notice backdated to the day of the blast. Anglo American's 5mn t/yr Grosvenor mine has also been non-operational since July 2024, when a fire severely damaged the underground site. The company did not disclose a reopening timeline for the site in its 2025 production guidance released in February. The firm previously shut the Grosvenor site over March-May 2022 after a fatal accident. Anglo American is not the only coking coal miner currently dealing with safety challenges. Australian producer GM³ halted production at its 3mn-3.5mn t/yr Appin mine in New South Wales on 6 April, following a blast that injured four workers. The company and state regulators are investigating the incident, with Appin closed until further notice. Argus ' metallurgical coal premium hard low-vol fob Australia has been falling over the past month, dropping from $183/t on 10 March to $174/t on 8 April. But the price rose from $166/t on 3 April to $174/t on 4 April after Anglo American declared force majeure on Moranbah North shipments. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Flooding on US rivers mires barge transit

07/04/25

Flooding on US rivers mires barge transit

Houston, 7 April (Argus) — Barge transit slowed across the Arkansas, Ohio and lower Mississippi rivers over the weekend because of flooding, which prompted the US Army Corps of Engineers (Corps) to close locks and issue transit restrictions along the waterways. The Corps advised all small craft to limit or halt transit on the McClellan-Kerr Arkansas River Navigation System (MCKARNS) in Arkansas because flows reached above 200,000 cubic feet per second (cfs), nearly three times the high-water flow. The heavy flow is expected to persist throughout the week, posing risks to those transiting the river system, said the Corps. Some barges have halted movement on the river, temporarily miring fertilizer resupply efforts in Arkansas and Oklahoma in the middle of the urea application season. The Corps forecasts high flows to continue into Friday, and the National Weather Service predicts several locations along the MCKARNS will maintain a moderate to minor flood stage into Friday as well. Both the Arthur V Ormond Lock and the Toad Suck Ferry Lock, upriver from Little Rock, Arkansas, shut on 6 April because of the high flows. Flows along the Little Rock Corps district reached 271,600cfs on 7 April. The Corps forecasts high flows to continue into Friday. Ohio and lower Mississippi rivers The Corps restricted barge transit between Cincinnati, Ohio, and Cairo, Illinois, on the Ohio River to mitigate barge transportation risks, with the Corps closing two locks on the Ohio River on 6 April and potentially four more in the coming days. Major barge carrier American Commercial Barge Line (ACBL) anticipates dock and fleeting operations will be suspended at certain locations along the Mississippi and Ohio rivers as a result of the flooding. NWS forecasters anticipate major flooding levels to persist through the following week. Barge carriers also expect a backlog of up to two weeks in the region. To alleviate flooding at Cairo, Illinois, where the Ohio and Mississippi Rivers meet, the Corps increased water releases at the Barkley Dam on the Cumberland River and the Kentucky Dam on the Tennessee River. The Markland Lock, downriver from Cincinnati, Ohio, and the Newburgh lock near Owensboro, Kentucky, closed on 6 April. The Corps expects the full closure to remain until each location reaches its crest of nearly 57ft, which could occur on 8 or 9 April, according to the National Weather Service (NWS). Around 50 vessels or more are waiting to transit each lock, according to the Lock Status Report published by the Corps on 7 April. The Corps also shut a chamber at both Cannelton and McAlpine locks. The John T Myers and Smithland locks may close on 7 April as well, the Corps said. The Olmsted Lock, the final lock before the Ohio and Mississippi rivers, will require a 3mph limit for any traffic passing through. The NWS expects roughly 10-15 inches of precipitation fell along the Ohio and Mississippi River valleys earlier this month, inducing severe flooding across the Ohio and Mississippi River valleys. A preliminary estimate from AccuWeather stated an estimated loss of $80-90bn in damages from the extreme flooding. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Funding cuts could delay US river lock renovations

03/04/25

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump to 'stand firm' on tariffs as markets crash

03/04/25

Trump to 'stand firm' on tariffs as markets crash

Washington, 3 April (Argus) — President Donald Trump does not intend to back down from his plan for sweeping import tariffs that have already caused a sell-off in global equity markets and some commodities, administration officials say. The tariffs — which will start at 10pc for most imports on 5 April before steeper country-specific tariffs take effect on 9 April, with exceptions for some energy and mineral imports — have caused key stock indexes to drop by as much as 5pc, with even larger declines in crude futures, as investors brace for lower growth and a higher chance of a recession. Trump earlier today defended the tariffs, as he prepared to leave the White House for a dinner tonight at a golf tournament at one of his resorts in Florida. "THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING," Trump wrote in a social media post before major stock markets opened. Trump's cabinet has downplayed the short-term price effect of the tariffs, which they say will boost economic growth in the US and cause a resurgence in domestic manufacturing. US commerce secretary Howard Lutnick said he does not think there is "any chance" that Trump will rescind the tariffs, and said Trump will only begin to work on new trade deals once a country has "really, really changed their ways" on trade practices. "Trump is going to stand firm because he is reordering global trade," Lutnick said today in an interview with CNN. "Make no mistake about it, America has been exploited, and he is done allowing America to be exploited." Other administration officials have suggested a greater potential for lower tariffs in the near-term. US treasury secretary Scott Bessent has encouraged world leaders to "take a deep breath" and not to "panic" because the tariff rates that Trump announced were a "ceiling" that might come down, so long as there was no retaliation. "Don't immediately retaliate, let's see where this goes, because if you retaliate, that's how we get escalation," Bessent said on 2 April during interview on Fox News. The tariffs have caused bipartisan backlash on Capitol Hill, but so far legislative action has been symbolic and unlikely to become law. The US Senate, in a bipartisan vote on 2 April, approved a joint resolution that would end the justification Trump has used to put tariffs on Canada. US senators Chuck Grassley (R-Iowa) and Maria Cantwell (D-Washington) introduced a bill today to eliminate most new presidential tariffs after 60 days without approval by the US Congress. Democrats say the tariffs will force consumers to pay far more on everyday goods, with revenue offsetting Republican plans to provide more than $5 trillion in tax cuts. "Donald Trump is using tariffs in the dumbest way imaginable. In fact, Donald Trump slapped tariffs on penguins and not on Putin," US Senate minority leader Chuck Schumer (D-New York) said today, in reference to Trump's decision to put a 10pc tariff on an island populated only with penguins. Trump has claimed his country-specific tariffs are "reciprocal" even though they have no relation to the tariffs each country charges on US imports. Instead, Trump's tariffs were calculated based on a universal equation that is set at half of the country's trade deficit with the US, divided by the country's imports from the US, with a minimum tariff rate of 10pc. Major US trading partners are preparing for retaliatory tariffs. Canada's prime minister Mark Carney said he would respond to Trump's tariffs on automobiles, which took effect today, by "matching the US approach" and imposing a 25pc tariff on auto imports that do not comply with the US-Mexico-Canada free trade agreement. China said it was preparing unspecified countermeasures to US tariffs that would be set at 54pc. Trump's cabinet today dismissed the market reaction to the tariffs. Stock markets are going through a "short-term adjustment" but the tariffs will ultimately result in more growth and additional investments, US Small Business Administration administrator Kelly Loeffler said today in an interview on Fox News "The gravy train is over for the globalist elites," said Loeffler, who previously was a top executive at US exchange operator ICE. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico manufacturing extends contraction in March

02/04/25

Mexico manufacturing extends contraction in March

Mexico City, 2 April (Argus) — Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today. The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months. Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month. Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction. In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said. PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data. Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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