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Australian coal exports rise as traders’ screens fill with offers

14 Oct 2013 15:50:06 | csd

The volume of coal shipped from the Australian port of Newcastle rose to 3.2m tonnes last week when market prices began easing and traders reported the market was heavy with offers.

Newcastle Port Corp data released on Monday shows 6.5% more coal was shipped from the port’s three terminals in the seven-day period ending 07:00 hours Sydney time on 14 October, compared with the previous week.

The rise in exports depleted the stocks at the two Port Waratah Coal Services (PWCS)-owned terminals to 1.3m tonnes, down 16% from the end of last week. The third Newcastle Coal Infrastructure Group-owned terminal does not publish stock information.

Japanese power companies imported a record 5.4m tonnes of coal in September – up 24% year on year and 8.8% above the volume imported in August, the Federation of Electric Power Companies of Japan said last week.

On Monday, a December-loading FOB Newcastle cargo changed hands at $80.25/tonne (though globalCOAL), down from a previous trade at $81.25/tonne recorded a week ago.

Weather forecast

With the Australian summer approaching, Australia’s Bureau of Meteorology has forecast average cyclone activity over the November 2013 – April 2014 period. Cyclones can affect ship-loading at coastal terminals and the heavy rainfall they often bring can slow production or even close mines in Queensland.

The bureau said typical Australian tropical cyclone season averages around 11 tropical cyclones with an average four cyclones crossing the coast, although “coastal impacts can be felt when tropical cyclones remain well offshore”. The eastern region – which includes coal-rich Queensland and New South Wales – sees around four cyclones in an average year.

In 2011, flooding in Queensland disrupted huge amounts of designated coal tonnage from Australia, causing FOB (free on board) Newcastle physical and paper prices to soar to their highest levels since the fourth quarter of 2008. The necessary short covering from the loss of more than 4.5m tonnes of thermal coal as a result of the floods caused market prices to jump considerably. South Korean and Japanese utilities trying to match grades to their requirements ended up turning to Indian and Chinese traders to take pre-bought cargoes and place them into north Pacific ports.

ICIS data show FOB Newcastle spot prices rose to $143.50/tonne on 7 January 2011, nearly double their current value at $78.75/tonne. Manca Vitorino

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