Australian exports fall on higher prices
Exports to India may pick up further
Australian thermal coal exports dropped by 11% m-o-m to 15.24 million tonnes (mnt) in February 2024, as per BigMint’s vessel line-up data. Moreover, exports rose by 4% as compared to 14.62 mnt in February 2023. The drop in exports was attributed to higher prices. Prices of Australian thermal coal of 5500 NAR rose by 2% m-o-m, to $97.2/t FOB Newcastle in February 2024, up from $95.25/t FOB Newcastle in January 2024.
Exports drop amid supply constraints in ports
Australian coal exports faced challenges due to maintenance shutdowns at key ports. Hay Point Port underwent maintenance from 29 January 2024 to 15 February 2024, causing congestion at other ports. In the previous year, Hay Point Port’s total coal exports amounted to 37 mnt, contributing to Australia’s overall coal exports of 347.32 mnt.
Hay Point Port Berth 3 was undergoing maintenance from 25 February 2024 to 5 March 2024, while DBCT Port Berth 2 is scheduled for maintenance from 21 February to 13 March 2024. These supply constraints amidst maintenance activities influenced export volumes.
Country- wise exports
Australian thermal coal exports to Japan stood at 6.42 mnt in February 2024, dropped by 19% m-o-m. The figure accounted for almost 42% of total exports.
The notable uptick was primarily driven by increased demand from Asian buyers seeking alternatives to Russian coal amidst recent U.S. sanctions. Additionally, buyers from China’s mainland hesitated due to lingering payment issues. Favourable conditions on the supply side also contributed, as rainy weather disrupted coal production and transport in Indonesia, particularly in Sumatra. Consequently, end-users turned to alternatives such as Australian coal.
Exports to Taiwan rose by 8% in the month under review, with shipments at 1.38 mnt. Exports to Taiwan totalled 0.81 mnt.
Exports to India rose by 63% during the month. Exports to India in February 2024 stood at 0.41 mnt as against 0.25 mnt in January 2024. This increase coincided with India’s Ministry of Power extending the deadline for blending imported coal in domestic thermal power plants to June 2024 from March 2024. The decision aimed to address logistical constraints impacting domestic coal supplies amidst an anticipated surge in peak power demand to 250 gigawatts during April-June. Power companies responded by securing imported coal contracts and maintaining sufficient reserves to meet summer demand, driving the rise in exports to India.
Port-wise exports
Exports from Newcastle dropped by 16% m-o-m at 10.96 mnt in February 2024 as against 13.08 mnt in January 2024. Shipments from Abbot Point stood at 1.94 mnt in February 2024 as against 1.29 mnt in January 2024. Supplies from Gladstone rose by 34% m-o-m to 1.36 mnt in February 2024 as against 1.01 mnt in January 2024. However, exports from Port Kemble dropped 21% m-o-m to 0.26 mnt in February 2024 as against 0.33 mnt in January 2024.
Outlook
It is expected that exports may rise in the near term as demand from Indian buyers is expected to arise from the second half of March to prepare for the seasonal peak demand period ahead of the monsoon, although current high stockpiles at power plants may postpone the procurement.
Source: BigMint
