Cookies on the ICIS website

close

Our website uses cookies, which are small text files that are widely used in order to make websites work more effectively. To continue using our website and consent to the use of cookies, click away from this box or click 'Close'

Find out about our cookies and how to change them

Australia’s Newcastle coal exports steady week on week

25 Mar 2013 19:13:06 | csd

ICIS_00148540.jpg

Coal exports from the Australian port of Newcastle were just 1.3% higher at 2.4m tonnes in the week ending 24 March, port operator data published on Monday show.

The two Port Waratah Coal Services (PWCS) terminals loaded 1.94m tonnes on to 19 ships in the seven-day period ending Sunday, the Hunter Valley Coal Chain Coordinator (HVCCC) said in its weekly report.

"PWCS ship loading for the week is at a rate of 101.2m tonnes/year, with a month-to-date rate of 93.1m tonnes/year," the report said. Last week, the month-to-date rate was 89.8m tonnes/year.

The eastern Australia port's third terminal, owned by Newcastle Coal Infrastructure Group, does not publish figures, but ICIS estimates that slightly more than 460,000 tonnes was shipped from that terminal in the week.

The number of vessels with a notified arrival time to reach Newcastle increased to 52 from 46 last week, according to the Newcastle Port Corporation. HVCCC said 25 vessels are waiting offshore to load at the PWCS terminals, up from 14 last week.

Stocks at the PWCS-owned terminals increased by more than 31% week on week to just under 1m tonnes.

Bearish outlook

The physical FOB Newcastle market has taken on a more bearish note in recent weeks, with demand looking feeble. Negotiations are continuing for an annual supply contract price beginning in April between Australian producers and Japanese buyers.

Often while the annual talks are in progress, some premium is added into prices at the Australian market, particularly for the front month, but even April-loading cargo prices have started to weaken under the bearish pressure.

Demand from Asian countries is weak. Domestic coal prices in China are weak also, so the incentive to import coal is not there for Chinese buyers. Coal stocks along China's south coast are also quite high, giving Chinese buyers even more reason to stay out of the international market.

Asian buyers, Chinese particularly, are still watching how prices at major markets pan out, sources said, with South Africa's FOB Richards Bay and Europe's DES ARA also shedding considerable value recently. "The Asians will only start buying when [global] prices start to go up," a Europe-based trader said.

Sources think the settlement between Australian producers and Japanese buyers could be about $96/tonne. Just a week ago, $99/tonne was being suggested, but the growing bearishness in the market has reduced expectations.

Mine operators have started to react to the lower prices. Last week, coal producers in Australia such as Xstrata and Whitehaven Coal announced cost-cutting measures at mines in New South Wales.

Weak global coal prices were cited as drivers in both cases. Fionn O'Raghallaigh

Other Options