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Australia to export more coking coal in 2019

  • : Coking coal
  • 19/09/30

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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24/11/04

US railroad-labor contract talks heat up

US railroad-labor contract talks heat up

Washington, 4 November (Argus) — Negotiations to amend US rail labor contracts are becoming increasingly complicated as railroads split on negotiating tactics, potentially stalling operations at some carriers. The multiple negotiating pathways are reigniting fears of 2022, when some unions agreed to new contracts and others were on the verge of striking before President Joe Biden ordered them back to work . Shippers feared freight delays if strikes occurred. This round, two railroads are independently negotiating with unions. Most of the Class I railroads have traditionally used the National Carriers' Conference Committee to jointly negotiate contracts with the nation's largest labor unions. Eastern railroad CSX has already reached agreements with labor unions representing 17 job categories, which combined represent nearly 60pc of its unionized workforce. "This is the right approach for CSX," chief executive Joe Hinrichs said last month. Getting the national agreements on wages and benefits done will then let CSX work with employees on efficiency, safety and other issues, he said. Western carrier Union Pacific is taking a similar path. "We look forward to negotiating a deal that improves operating efficiency, helps provide the service we sold to our customers" and enables the railroad to thrive, it said. Some talks may be tough. The Brotherhood of Locomotive Engineers and Trainmen (BLET) and Union Pacific are in court over their most recent agreement. But BLET is meeting with Union Pacific chief executive Jim Vena next week, and with CSX officials the following week. Traditional group negotiation is also proceeding. BNSF, Norfolk Southern and the US arm of Canadian National last week initiated talks under the National Carriers' Conference Committee to amend existing contracts with 12 unions. Under the Railway Labor Act, rail labor contracts do not expire, a regulation designed to keep freight moving. But if railroads and unions again go months without reaching agreements, freight movements will again be at risk. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Anglo American 3Q iron ore output up, met coal down


24/10/24
24/10/24

Anglo American 3Q iron ore output up, met coal down

London, 24 October (Argus) — UK-South African mining firm Anglo American boosted iron ore production on the quarter and year in July-September, driven by record output from Brazil's Minas-Rio facility. But coking coal output was down after a fire at Australia's 5mn t/yr Grosvenor mine in late June. Anglo American's 2024 iron ore production guidance is unchanged at 58mn-62mn t. Overall Anglo American iron ore output increased by 2pc on the year, as an 11pc rise at Minas-Rio offset a 3pc decline at South Africa's Kumba site. The drop at Kumba was attributed to a change in a third party's logistical capacity. Realised prices were 3pc below the market benchmark at Minas-Rio, which the firm attributes to a large volume of sales being priced on a provisional basis. Iron ore from Kumba averaged a 64pc Fe content and priced 4pc above a 62pc Fe fines benchmark. Anglo American's 2024 coking coal production guidance remains 14mn-15.5m t, after July's downward adjustment . Third-quarter output was down by 6pc on the year, at 4.1mn t, after the fire at Grosvenor in June . Third-quarter production at other sites rose by 3pc on the year. January-September output was 8pc up on the year, at 11.2mn t. Coking coal sales fell by 7pc to 4mn t following the drop in production. Pricing was comparable to index levels at $253/t, the company said, an improvement from the 93pc year-to-date price realisation. Damage at Grosvenor was less severe than expected, Anglo American said, and the firm aims to sign an agreement covering the sale of its coking coal assets in the next few months. Australian coal producer New Hope , Chinese-owned Australian producer Yancoal and Australia's M Resources are among those interested in Anglo American's five Queensland coking coal mines. By Austin Barnes Anglo American Q3 2024 results Q3 2024 Q2 2024 ±% Q2 2024 Q3 2023 ±% Q3 2023 Iron ore output Total 15.7 15.6 1.0 15.4 1.0 Kumba 9.5 9.2 3.0 9.2 -2.0 Minas-Rio 6.3 6.4 -2.0 5.6 5.0 Iron ore sales Total 15.2 16.5 -8.0 14.7 -1.0 Kumba 8.8 9.7 -9.0 8.9 -2.0 Minas-Rio 6.4 6.4 -7.0 5.9 3.0 Anglo American Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

CSX forecasts softer 4Q rail demand


24/10/17
24/10/17

CSX forecasts softer 4Q rail demand

Washington, 17 October (Argus) — Eastern US railroad said it expects that fourth quarter commodity market conditions will be mixed, limiting some freight demand. "Going into the fourth quarter, near-term conditions look modestly more challenging," chief executive Joe Hinrichs said on Wednesday. But the railroad expects "modest volume growth", supported by a few segments including chemicals and agriculture. But lower locomotive fuel prices and the impact of international coking coal prices, which are linked to export rail contracts, could drive a decrease in total revenue during the fourth quarter. He estimated that impact at roughly $200mn compared with last year's fourth quarter revenue of $3.68bn. CSX expects to see a carryover of year-over-year momentum in chemicals, agriculture and food, forest products and minerals, while metals and automotive will continue to be challenged. Demand for metals shipments is predicted to soften through the end of the year. Interest in shipments, particularly steel, is soft because of "sluggish demand, ample supply and low commodity prices", chief commercial officer Kevin Boone said. A weaker-than-anticipated automotive market contributed to the drop in metals demand. Consumer demand for automotive products has been reduced by high retail prices and interest rates, which has led to increased dealer inventories and slower production, Boone said. But CSX expects that an "interest rate easing cycle will help these markets normalize," Boone said. Metals and equipment volume fell in the second quarter, primarily because of lower steel and scrap shipments. Shipments of metals and equipment fell by 9pc to about 64,000 carloads compared with the same three months in 2023. Revenue dropped to $208mn, down by 8pc from a year earlier. Automotive volume dropped in the second quarter because of lower North American vehicle production, CSX said. Automotive traffic fell to 301,000 railcars loaded, down by 2pc from the third quarter 2023. Automotive revenue dropped to $98mn, down by 3pc compared with a year earlier. The outlook for fertilizer shipments is mixed following the third quarter as a decline in long-haul phosphates shipments persisted. Volume was negative, but the railroad was able to haul some profitable spot shipments. Shipments of fertilizer fell to 45,000 carloads in the third quarter, down by 4pc from a year earlier. Fertilizer revenue dropped to $118mn, down by 5pc from a year earlier. CSX expects growth in some market segments. Chemicals freight demand is expected to continue growing following "consistent, broad strength across plastics, industrial chemicals, LPGs, and waste. That demand helped boost chemicals volume by 9pc compared with a year earlier. Chemicals revenue rose to $727mn in the second quarter, up by 13pc compared with a year earlier. Agricultural and food products shipping demand is expected to continue growing, led by demand for grain and feed ingredients from the Midwest for supplies. That follows a third quarter when higher ethanol shipments, as well as increased overall volume helped raise volume by 9pc from the third quarter of 2023. Revenue from shipping agricultural and food products rose to $416mn, up by 11pc from a year earlier. CSX expects intermodal growth to continue with the trucking market falling, which would help drive more container freight to rail. Intermodal shipments are goods shipped in containers and trailers between different modes of transportation. The 1-3 October strike by the International Longshoremen's Association (ILA) did impact intermodal traffic, but the railroad was pleased with the "relatively quick short-term solution", Boone said. International intermodal volume during the third quarter rose because of higher east-coast port traffic. Domestic volume was mostly flat. Overall intermodal volume during the quarter increased by 3pc compared with a year earlier. But lower revenue per container helped reduce total intermodal revenue by 2pc to $509mn. CSX does not expect a major shift in coal volume through the end of the year as coal markets seem relatively stable and utility stockpiles are sufficient, Boone said. Rising natural gas prices are also unlikely to stimulate a "near-term step-up in volumes". Export coal demand has been consistent lately, particularly from buyers in Asia. But revenue per railcar for export coal could make a modest single digit drop, as contracts are tied to international coal benchmarks and prices fell earlier this year. Expport coal voume rose to 11.1mn short tons (10.1mn metric tonnes) in the second quarter on higher demand for thermal and coking coal. But domestic coal deliveries fell to 10.2mn st, down by 12pc from a year earlier, on lower deliveries to power plants and lake and river terminals. Rail coal volume fell by 2pc from a year earlier, while revenue dropped by 7pc to 553mn st. Total CSX profits rose to $894mn, up by 8pc compared with third quarter 2023. Revenue increased to $3.6bn, up by 1pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Some eastern US rail shipments restart after Helene


24/09/30
24/09/30

Some eastern US rail shipments restart after Helene

Washington, 30 September (Argus) — Some railroad operations in the southeastern US have resumed in the aftermath of Hurricane Helene, but major carriers warn that some freight may be delayed while storm-damaged tracks are repaired. Rail lines in multiple states were damaged after Hurricane Helene made landfall on the northeastern Florida coast on 26 September as a category 4 storm and traveled northwards as a downgraded but still dangerous storm into Georgia, Tennessee, and the Carolinas. The storm left significant rain and wind damage in its wake, including washed-away roads, flooded lines, downed trees and power outages. Eastern railroads CSX and Norfolk Southern (NS) said they are working around the clock to restore service to their networks. Norfolk Southern said it had made "significant progress" towards its recovery with most major routes back in service including its Chattanooga, Tennessee, to Jacksonville, Florida, line as well as its Birmingham, Alabama, to Charlotte, North Carolina route. Norfolk Southern said freight moving through areas that are out of service could "see delays of 72 hours". Several of Norfolk Southern's other routes remain out of service, including rail lines east and west of Asheville, North Carolina, because of historic levels of flooding. There are multiple trees to remove along a 70-mile stretch from Macon, Georgia, to Brunswick, Georgia. And downed power lines are keeping the railroad's lines from Augusta, Georgia, to Columbia, South Carolina, and Millen, Georgia, out of service. CSX said "potential delays remain" but did not provide specifics. However, the railroad said it had made "substantial progress" in clearing and repairing its network. The railroad's operations in Florida have mostly reopened, as have rail lines in its Charleston subdivision, which crosses South Carolina and Georgia. But bridge damage and major flooding has kept CSX's Blue Ridge subdivision out of service. A portion of the line running from Erwin, Tennessee, to Spartanburg, South Carolina, has been cleared, but CSX said "a long-term outage" is expected for other parts of the rail line. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Gulf coal loadings resume after Francine: Update


24/09/18
24/09/18

US Gulf coal loadings resume after Francine: Update

Updates status of United Bulk Terminals in paragraph 4 Washington, 18 September (Argus) — Some coal terminals on the US Gulf Coast have resumed operations this week after power was restored following Hurricane Francine. SunCoke Energy said today that the Convent Marine Terminal in Louisiana returned to full operations on 15 September. The company said last week that the terminal was not damaged but did lose electricity after the hurricane made landfall in the state on 11 September. Other terminals in the area that handle coal also experienced some power outages from Francine. Kinder Morgan's International Marine Terminals is "currently ramping back up after working through some power and post-storm issues," the company said today. Kinder Morgan also said all of its other terminals are fully operational. However, a market source on 17 September said that T Parker Host's United Bulk Terminals (UBT) in Davant, Louisiana, is still under force majeure because a barge reportedly sank and blocked the facility's barge terminal after Francine had passed through Louisiana. Prior to the barge incident, the company had expected the terminal to return to full staff on 13 September. T Parker Host did not respond for requests for comment. Impala Terminals also has not responded to requests on the status of the Burnside terminal in Louisiana. Vessel tracking information from analytics firm Kpler show operations from all four terminals have at least partially resumed. A total of five oceangoing vessels arrived at Burnside, UBT and Convent between 13 September and today and all but one of them had already been loaded with coal and departed by today. By Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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