Australian thermal coal exports rose by 13% y-o-y to 199.48 mnt in CY’23 as against 176.89 mnt in the same period last year. Moreover, exports rose by 18% m-o-m to 19.79 mnt in December 2023 as against 16.84 mnt in November 2023. Exports rose amid robust demand from Asian countries and supply disruptions in South Africa prompting end users to opt for Australian coal.
Drop in prices simulate higher buying
Australian thermal coal prices for 5500 NAR dropped by 46% y-o-y to $106.47/t FOB Newcastle in CY’23 as against $195.66 FOB Newcastle in CY’22. Thermal coal price movement has followed a declining trend encouraging Indian buyers to increase purchases. The global price decline also motivated imported coal-based (ICB) plants to replenish their inventory as they prepare to ramp up generation following government directives.
Meanwhile, smaller-scale traders are actively procuring material, recovering from setbacks caused by higher prices last year.
Exports ( country-wise)
Japan was the largest buyer of Australian coal at 72.09 mnt in CY’23, down by 17% y-o-y as against 86.36 mnt in CY’22.
Shipments to China were recorded at 50.25 mnt in CY’23 as against nil as compared to the same period last year. China officially ended its unofficial ban on exports from Australia, removing all restrictions initially imposed in the fourth quarter of 2020 earlier in CY’23. Therefore, exports in CY’22 remained nil whereas 50.25 mnt in CY’23.
Moreover, shipments to Taiwan and South Korea dropped by 7% and 28% y-o-y to 23.65 mnt and 17.53 mnt respectively in CY’23.
Exports to India dropped by 11% y-o-y to 8.31 mnt in CY’23 as against 9.30 mnt in CY’22. Moreover, exports to Indonesia dropped 11% y-o-y to 2.26 mnt in CY’23 as against 2.53 mnt in CY’22.
Port-wise exports
Exports from Newcastle rose by 7% y-o-y at 144.62 mnt in CY’23 as against 134.89 mnt in CY’22. Shipments from Abbot Point stood at 19.20 mnt in CY’23 as against 12.15 mnt in the same period last year.
Supplies from Gladstone rose by 11% y-o-y to 17.99 mnt in CY’23 as against 16.23 mnt in CY’22. Moreover, exports from Port Kemble rose by 30% y-o-y to 2.97 mnt in CY’23 as against 2.29 mnt in CY’22.
Australian coal exports up 18% in Dec’23
Australian thermal coal exports increased by 18% m-o-m to 6.57 mnt in December 2023 as against 4.53 mnt in November 2023. Japan was the largest importer at 7.25 mnt (up by 22% y-o-y) followed by China at 4.93 mnt (dropped by 16% y-o-y) and Taiwan at 2.29 mnt. Moreover, exports to India dropped by 43% y-o-y to 0.33 mnt in December 2023 as against 0.59 mnt in November 2023.
Recent development:
Dartbrook coal mine set to restart operations
In a significant recent development, Australia’s Pacific Coal secured funding from Vitol Asia Ltd. to reopen the Dartbrook mine in New South Wales, closed since 2007. Plans of initial production from the Dartbrook site is in the first quarter of 2024 and the deal includes a sales and marketing agreement with Vitol.
NSW mines ramp up thermal coal production
Post-flood recovery in New South Wales (NSW) there has been a surge in coal production, notably at Hunter Valley Operations and Mt. Arthur Coal. Six mines are now selling 1 mnt monthly. The “big six” mines are open-cut mines, primarily producing thermal coal for exports, with combined sales rising over 20% y-o-y to 45.7 mnt in January- August 2023.
Outlook
It is anticipated that exports may drop in the near-term amid rising domestic production from India and China. Also, Chinese domestic prices have become lucrative than the seaborne levels. Additionally, the expectation of rainfall in the country might exert pressure on exports.
