Newcastle coal exports decline; more PWCS strikes lined up
Coal exported from the Australian port of Newcastle dropped by 16% in the week ending 17 June, with exports over the next seven days likely to be affected by more strike actions, set to begin Thursday.
Newcastle Port Corporation data out on Wednesday said 2.6m tonnes of coal were shipped over the week. The week-on-week drop was the first in five weeks.
Unionised workers for Port Waratah Coal Services (PWCS), which owns two of the three terminals at Newcastle, have been staging protected strikes of varying lengths over the past five weeks because of a dispute over work and pay conditions.
Starting Thursday at 23:00 Sydney time, each night through Wednesday, unionised PWCS workers will stage four-hour strike actions, said a spokesman for the Maritime Union of Australia in an e-mail. His union is one of five involved in the ongoing action.
Until now, the strikes have had minimal impact on coal shipping from Newcastle. But less coal was shipped from the PWCS terminals compared with a week earlier, according to Hunter Valley Coal Chain Coordinator's (HVCCC) latest weekly report. PWCS unionised workers held two four-hour strikes on Friday and Saturday.
The terminal, owned by Newcastle Coal Infrastructure Group (NCIG), does not publish shipping details. But with Newcastle and HVCCC figures used to produce an estimate, more than 600,000 tonnes were exported from the NCIG terminal over the week.
The effect of the strike on exports has been limited so far, so FOB Newcastle physical and swaps prices largely have not reacted. In recent weeks FOB Newcastle prices have weakened as expectations about Pacific basin demand have been downgraded. The slide of the Australian dollar against the US dollar has also pressured FOB Newcastle prices (see CSD 13 June 2013).
On Tuesday a 25,000 tonne August cargo was sold at $81.15/tonne, the cheapest FOB Newcastle physical deal reported to ICIS since 30 October 2012. July-loading cargoes are selling above August and September cargoes. The backwardation has been present for a while, with one commodity-house trader attributing the shape of the curve to some players' being caught short on the front month.
Coal in stock at the PWCS terminals increased to 1.67m tonnes at midnight on 16 June, a 33% increase week on week and close to the highest end-of-week figure this year, of 1.68m tonnes. At midnight on 18 June, coal in stock had decreased to 1.57m tonnes.
Two vessels are waiting off shore to load at the three terminals, Newcastle Port Corporation said, which is two fewer than a week earlier. Ships with a notified arrival time have increased by three to 40. Fionn O'Raghallaigh
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