In April, Australia exported record-high volumes of thermal coal to India, reflecting shifting trade flows in response to Beijing’s coal import embargo. According to data from the Australian Bureau of Statistics (ABS) provided through GTT, Australia’s thermal coal exports increased by 14 percent in April from an eight-year low in March, but fell by 7 percent from April 2020.
For the fourth month in a row, there were no shipments to China, and preliminary shipping data suggests that this trend will continue into early June. Shipments to Vietnam have also decreased this year, and the combination of these two causes has reduced total shipments by 10% from January to April of last year.
In January-April, increasing shipments to India, South Korea, Taiwan, and Japan largely offset the loss. The increased shipments to South Korea, Taiwan, and Japan are due to lower-than-average coal purchases in the first half of 2020, as a result of the Covid-19 shutdowns, which hampered industrial output.
India, which is experiencing a Covid-19 boom, has more than made up for reduced imports in the first half of 2020, with Australian exports to the country reaching a new high of 2.46 million tonnes in April.
This could be due to a larger-than-average discount for low-grade Australian coal export prices of 5,500 kcal/kg NAR in April compared to similar-grade South African export prices.
This premium widened in early to mid-May before narrowing again.
As providers seek to diversify in response to Beijing’s import embargo, Australian coal shipments have continued to travel to smaller markets such as Indonesia, Thailand, the Netherlands, Malaysia, the United Arab Emirates, the Philippines, and Pakistan.
In April, the Argus Newcastle 6,000 kcal/kg price was $91.32/t, up from $88.88/t in March and $60.31/t in April 2020. It was valued at $115.47 per tonne on May 28 and averaged $97.26 per tonne in May.
In April, the average Argus Newcastle 5,500 kcal/kg price was $57.21/t in Newcastle, up from $55.73/t in March and $49.09/t in April 2020. It was valued at $65.40 per tonne on May 28 and averaged $56.45 per tonne in May.
In April, the price gap between the Argus Newcastle 6,000 kcal/kg and 5,500 kcal/kg prices, not adjusted for heat, averaged $34.11/t in Newcastle, up from $33.15/t in March and $11.22/t in April 2020.
According to the ABS, Australia’s average thermal coal export price was $73.07/t in April, up from $71.43/t in March and $62.45/t in April 2020.
The April prices were calculated using the ABS’s $0.7703 US-Australian dollar exchange rate for the month. This was similar to March, but more than the $0.6298 in April 2020.
