Australian coal heads for China despite ban

Australian shipments of coal to China have resumed, after the port of Gladstone in Queensland sent a shipment bound for Hong Kong and with initial shipping data showing that cargoes also left the New South Wales (NSW) port of Newcastle bound for Chinese ports in February.

The Chinese import ban on Australian coal remains in place as tensions between and Beijing and Canberra appear high, with a hiatus in shipments leaving Australian ports bound for China since November. But early shipping data suggests that some small shipments did leave in February, reinforced by Gladstone's official port data that a 27,000t cargo was bound for Hong Kong.

There was one shipment/month in January-September 2020 from Australia to Hong Kong but there were none in October 2020-January 2021.

The other two shipments to leave Australia for China in February were 75,000t shipments from the predominantly thermal coal port of Newcastle in NSW, one bound for Xiamen and the other for Bayuquan. Some Australian shipments were allowed to unload at Chinese ports in February, but this was seen as humanitarian move to release the crew rather than a resumption of coal trade between the two nations.

Gladstone shipped no coal to mainland China for the fourth month in a row in February, while heavy rain in Queensland's coal fields disrupted some deliveries to the port. It shipped 5.37mn t of coal in February, down by 8.5pc from January and down by 4.5pc from February 2020. Shipments to Japan and India slipped after a particularly strong January, while those to South Korea rebounded.

Argus last assessed high-grade Australian thermal coal at $87.23/t fob Newcastle for NAR 6,000 kcal/kg on 5 March, down from a 10-month high of $89.62/t on 29 January but up from a low of $46.18/t on 4 September. It assessed lower-grade coal at $55.58/t fob Newcastle for NAR 5,500 kcal/kg on 5 March, up from $55.01/t on 29 January and up from $35.04/t on 4 September.

The heat-adjusted premium on a NAR 6,000 basis for higher-grade thermal coal was $26.60/t on 5 March compared with $29.61/t on 29 January and $8.65/t at the end of August.

Argus last assessed the premium hard coking coal price at $122.75/t fob Australia on 5 March, down from a recent high of $157.25/t on 1 February but up from $103.50/t at the beginning of 2021.

Hard coking coal accounted for around a third of Gladstone's total exports in 2019, with lower-grade coking coal and thermal coal each accounting for a third.

By Jo Clarke