Chinese demand lifts Australia’s PWCS coal exports

Coal exports from the two Port Waratah Coal Services (PWCS) terminals at Australia's Newcastle port hit a 14-month high in October, driven by record monthly sales to China.

The PWCS terminals at Newcastle in New South Wales shipped 9.07mn t in October, up from 7.16mn t in September and from 6.45mn t in October 2022, according to port data. This is the most shipped from the port since August 2022, which was a strong month after flooding stopped deliveries to the port in July 2022 for almost two weeks.

January-October shipments totalled 76.78mn t, down from 77.18mn t during January-October 2022, with Newcastle shipments for the full year of 2022 at a decade low. But drier weather and increased Chinese demand for lower grade, unwashed coal is starting to translate into increased shipments moving into the last few months of 2023.

PWCS shipped a record volume of coal to China in October, Initial shipping data collated by Argus suggests, higher than any month including the strong buying period in 2019 when Chinese importing increased as the price for lower grade 5,500 kcal/kg NAR coal was around $50/t fob Newcastle.

Argus last assessed the 5,500 kcal/kg NAR price at $94.25/t fob Newcastle on 3 November, down from a recent high of $105.47/t on 13 October but up from $84.24/t on 1 September. It assessed the high-grade 6,000 kcal/kg NAR thermal coal at $123.43/t fob Newcastle on 3 November, down from $156.51/t on 1 September.

The heat-adjusted premium for higher grade thermal coal on a NAR 6,000 kcal/kg basis fell to $20.61/t from $62.61/t on 1 September and below a record $255.06/t on 6 January.

PWCS achieved strong shipment numbers for October despite deliveries to the port being disrupted by two scheduled shutdowns in the month. There is one major planned shutdown left for 2023 during 20-24 November.

PWCS ran down stocks to offset the supply disruption caused by the October shutdowns, with 1.6mn t left at the port on 31 October, down from 2.24mn t a month earlier. Stocks were still higher than average at the start of November, implying there should be sufficient coal to see the port through the 20-24 November shutdown.

The port's vessel queue fell to nine at the end of October from 12 at the end of September, which is below average for 2023 and the average of 28 ships in 2022 when congestion grew because of the heavy rainfall.

Around 11pc of PWCS' coal exports are semi-soft coking coal.

By Jo Clarke

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