Tuesday, January 14, 2014

Shipments to South Korea from Port Waratah Coal Services' terminals at the Australian port of Newcastle doubled to 2.2 million mt in January from the month before, the company said Monday.

South Korea bought 23.7% of the 9.2 million mt of coal loaded at PWCS' two terminals at Newcastle in January, up from a 10.25% share of December's total tonnage of 9.5 million mt, PWCS data showed.

Monthly shipment volumes from the PWCS terminals to South Korea last touched 2 million mt in March 2011, and the January total was the highest since Platts began tracking PWCS cargo destination data in January 2010.

The surge comes after South Korea's parliament in January approved a new tax on thermal coal imports that will kick in July 1.

Tendering activity by South Korean power companies has also increased in the past two months, traders said.

Power utilities in South Korea have a preference for Australian thermal coal with a calorific value of 5,700-6,000 kcal/kg on a net-as-received basis and an ash content of 17-20%, traders said.

The PWCS terminals shipped 1.85 million mt of coal to China in January, down from 2.11 million mt in December. Shipments to China comprised 20% of the January total, compared with 22% in December.

Prices for the type of mid-range calorific value thermal coal that is shipped to China from Newcastle -- 5,500 kcal/kg net-as-received fuel with ash to a maximum of 23% -- have declined to about $67/mt FOB Newcastle this week from $72/mt FOB in early December, according to Platts data.

Chinese customers of Australian thermal coal scaled back buying in the leadup to the week-long Lunar New Year holiday that began last Friday, market sources said.

The PWCS terminals shipped 4.2 million mt of coal to Japan in January, or 45.5% of the month's total, down from 4.6 million mt and a market share of 48.5% in December.

Another 475,000 mt was shipped to Taiwan in January, or 5% of the total, down from 1.4 million mt or 15% of the total in December.

Mexican power plants loaded 272,000 mt, about 3% of the terminals' throughput for the month.


India made a dramatic appearance as an export destination for Newcastle thermal coal in January, taking 125,000 mt, or roughly 1.3% of the total.

Newcastle coal producers have put significant effort into broadening their customer base to include Indian coal buyers, and were aided by January's sharp fall in vessel freight rates for the three- to four-week voyage to India from eastern Australia.

Thermal coal exports comprised 8 million mt of PWCS' shipments in January, and coking coal 1.2 million mt.

Newcastle port has three coal terminals, two operated by PWCS, whose major shareholders include Rio Tinto and Glencore, and the 66 million mt/year Newcastle Coal Infrastructure Group terminal owned by five coal producers including BHP Billiton and Peabody Energy.

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