By Jo Clarke

May 1, 2023 - Coal exports from Australia's Newcastle dipped in April from a firm March, although initial shipping data suggests that exports to China continued to increase from the New South Wales (NSW) port.

The two Port Waratah Coal Services (PWCS) terminals at Newcastle shipped 7.08mn t of coal in April, down from 7.53mn t in March and from 7.24mn t in April 2022, according to port data.

PWCS and the neighbouring Newcastle Infrastructure Group (NCIG) do not give destination details but PWCS shipped around 1.5mn t of coal to China and NCIG around 1.8mn t in April, according to initial shipping data collated by Argus. By comparison both firms shipped around 1mn t of coal to China in March, up from around 600,000t in February as Beijing's informal ban on Australian coal imports ended, according to the shipping data.

The vessel queue grew to 15 from nine at the end of March and from a three-year low of seven at the end of February but is still lower than the average of 28 ships in 2022.

Chinese buyers are more open to buying higher ash Australian thermal coal than other northeast Asian customers, which has contributed to a narrower premium for 6,000 kcal/kg NAR low-ash coal over the higher ash 5,500 kcal/kg NAR grade over the past three months compared with the previous year. The premium is still higher than the lows in 2020 when coal prices were depressed across the board.

Argus last assessed high-grade 6,000 kcal/kg NAR thermal coal at $184.98/t fob Newcastle on 28 April, up from $178.99/t on 31 March but down from $195.53/t on 24 February and from a peak of $444.59/t fob on 9 September 2022. It assessed low-grade 5,500 kcal/kg NAR thermal coal at $117.03/t fob Newcastle on 28 April, down from $120.68/t on 31 March and from $118.99/t on 24 February and $199.12/t fob on 9 September 2022.

The heat-adjusted premium for higher grade thermal coal on a NAR 6,000 kcal/kg basis rose to $57.31/t on 28 April from $43.34/t on 31 March but was down from a record $255.06/t on 6 January before Beijing eased restrictions on imports of Australian coal. The premium had hit lows of below $10/t prior to Beijing imposing its informal import ban.

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

All NSW coal-producing regions received average rainfall in April. Mining firms are still dealing with full water storage capacity that allows little headroom for any rainfall. But the potential for an El Nino weather pattern bringing drier or drought conditions to east Australia through the remainder of 2023 and into 2024 is rising.

Deliveries to Newcastle were disrupted by a major network-wide shutdown over 4-6 April with another scheduled for 23-25 May. PWCS stocks grew to 1.42mn t from 1.4mn t at the end of March. The other terminal operator NCIG does not release monthly data.