US-Australia’s Coronado to lift coal sales

US-Australian coal producer Coronado Coal will boost coal sales during July-December despite logistical challenges, as it maintains its output guidance of 16.4mn-17.2mn t for 2024.

The firm sold 7.8mn t of coal during January-June, leaving it a target of 8.6mn t for July-December to meet the bottom of its 2024 guidance. It has maintained this guidance despite warning that shipments from its Australian Curragh mine will be affected by a two-week rail disruption from the end of July. Coronado operates the Curragh mine in Queensland and two mining complexes in the US' Virginia. All produce coking and thermal coal.

Coronado's revenues were supported during April-June compared with January-March by a smaller discount for pulverised injection coal (PCI) against hard coking coal prices, which saw the PCI price rise while other metallurgical coal prices were under pressure. Its sales prices will remain strong in July-September, forecasts chief executive Douglas Thompson, on restocking in India and the rail disruption in Queensland, as well as the fire at Anglo American's Grosvenor mine that will disrupt Australian exports.

Thompson warned that there was some downside risk of $5-10/t to Australian PCI pricing but if this was realised it will see China restart buying from Australia. In the long term he expects more competition from Russia-origin PCI, as Russian coal producers find new routes to the seaborne market and regain market share lost because of an European embargo.

The premium for premium hard coal prices over PCI coal prices has shrunk to around $30/t from $145/t over the past six months. Argus last assessed the premium hard low-volatile price at $224/t fob Australia on 24 July and the PCI low-volatile price at $193.65/t.

Coronado's group sales volumes were up 8.3pc to 4.1mn t in April-June compared with January-March, reflecting higher sales from its Australian and US operations. The increase in volumes combined with reduced need to remove waste materials allowed Coronado to cut is mining costs by 27.5pc from the previous quarter to an average of $91.10/t of coal sold.

The firm expects costs to fall further in July-December as it demobilises more of its mining fleet at its Curragh mine. This reflects reduced waste removal and should have no impact of coal production at Curragh, Thompson said. Production at Curragh should increase in the second half of 2024, with 100,000t of coal production deferred from June to July because of heavy rainfall.

By Jo Clarke

Australian coal price comparisons ($/t)