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Fall in China’s high-ash coal demand pushes Australian cargoes to Europe, Africa - cFlow

Coal News - Published on Tue, 16 Oct 2018

Image Source: PortWays
According to an analysis of shipping data from cFlow, Platts trade flow software, the slowdown in Australian thermal coal trade to China is resulting in shipments of off-specification coal traveling longer distances to Europe and even Africa. “What is happening in China is having an impact further west,” a market source said. “There is some interest for Newcastle cargoes to India, especially 5,500 kcal/kg NAR coal, and even further afield to Europe,” he said. Some Australian high-ash coal cargoes have been sold even to Egypt, an emerging market. This anecdotal information is backed by data from Platts cFlow software which shows several ships carrying Newcastle coal to new destinations.

South African thermal coal might be considered a natural choice for Egyptian buyers, given its closer proximity, but price appears to be a greater consideration.

The market source said that “The price of Newcastle 5,500 kcal/kg NAR coal is lower than South African 5,500 kcal/kg NAR.”

According to S&P Global Platts data, the difference between FOB prices from the two origins is USD 5.50.

High-ash Australian coal is currently trading at USD 67/mt FOB Newcastle compared with USD 72.50/mt FOB Richards Bay, both on a 5,500 kcal/kg NAR basis. Capesize freight from Richards Bay to Rotterdam is at $7.40/mt, indicating a delivered 5,500 kcal/kg NAR price for South African coal to Europe of about USD 80 per mt.

For Australian 5,500 kcal/kg NAR cargoes, the Europe-delivered price would be not much higher than $80/mt CIF ARA on account of lower FOB prices at Newcastle.

ROTTERDAM-BOUND
Platts cFlow shows the 180,000 mt Capesize ship Stella Laura is currently off the coast of Western Australia and bound for Rotterdam port after leaving Newcastle port on October 2. The ship is due to reach its destination in Europe around November 21.

Historically high prices for 6,000 kcal/kg NAR thermal coal have stimulated European demand for 5,500 kcal/kg NAR off-spec material, including Australian coal, sources said.

A source said that some European power utilities are testing the suitability of Australian 5,500 kcal/kg NAR thermal coal in their power station boiler systems.

Source :

Posted By : Rabi Wangkhem on Tue, 16 Oct 2018
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