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Australia's NCIG Coal Loader Out for 6-12 Months

By Jo Clarke

February 16, 2021 - One of two shiploaders at Newcastle Coal Infrastructure's (NCIG) terminal at the port of Newcastle in Australia is likely to be out of action for 6-12 months, Australian rail haulage firm Aurizon said. The outage comes as stocks are high across Australia's coal ports.

The shiploader at the port in New South Wales (NSW) was damaged in late November, since when NCIG has not exported above 4mn t in any month. It exported 3.48mn t in January, down from 4.49mn t in January 2020 and 3.96mn t in December. NCIG had previously shipped more than 4mn t/month in every month since September 2019.

NCIG declined to comment on Aurizon's assertion that the shiploader will be out for up to a year. NCIG has said previously that the shiploader outage will cut its export capacity to 46mn t/yr from 54mn t/yr, or an average of around 3.8mn t/month from 4.5mn t/month.

Stockpiles are significantly above average at other NSW and Queensland coal ports, as shippers deal with changing trade patterns following China's ban on imports of Australian coal, according to Aurizon. High stocks could disrupt trade flows out of Australia if there is insufficient room for new coal to be unloaded at ports for loading onto waiting ships.

The broken shiploader means NCIG is unable to load at its Kooragang 10 berth and is reliant on its remaining shiploader to load vessels at the Kooragang 8 and 9 berths.

The outage at NCIG has caused the Hunter Valley coal chain to throttle back, according to Aurizon. It has also contributed to higher-than-average stockpiles at Newcastle, which shipped a total of 13.91mn t of coal in January, down from 14.92mn t in December but up from 13.88mn t in January 2020. The decline in shipments from NCIG has been partially offset by stronger shipments through the Port Waratah Coal Services terminals at Newcastle.

Argus last assessed the high-grade thermal coal price at $86.67/t for 6,000 kcal/kg NAR on 12 February, down from $89.60/t on 29 January but up from $81.44/t at the beginning of January and a low of $46.18/t on 4 September. Argus assessed lower-grade coal at $55.52/t fob Newcastle for NAR 5,500 kcal/kg on 12 February, down from $57.92/t on 22 January but up from $52.99/t on 31 December and $35.04/t on 4 September.

The heat-adjusted premium on a NAR 6,000 basis for higher-grade thermal coal was $26.10/t on 12 February, down from $29.61/t on 29 January but up from $23.63/t on 31 December and $8.65/t at the end of August.