A volatile outlook for Australia’s coal exports
Australian thermal coal exports were down 21 per cent in the first quarter of 2020 and there are signs that this will be a continuing trend.
In the wake of a global pandemic, seaborne thermal coal prices hit new lows in April 2020 as oil prices plunged into negative territory for the first time in history. Weaker demand sentiment, together with a slow supply response from key coal exporters has created a severe oversupply and dragged down prices across all coal types.
With over half of global seaborne thermal coal operations operating at a loss, production cuts are much needed to stabilise prices as we head into this unprecedented period.
- China import ban:
China’s embargo on Australian coal imports has not been as severe as China hoped with cargoes being redirected to other demand centres.
- Weaker power demand in Japan:
Despite milder weather, continuing economic restrictions to control the spread of Covid-19 has limited demand from Japan.
- South Korea and India remain glimmers of hope:
Demand from South Korea and India rose by a combined total of 1.1Mt to 2.5Mt.
- Supply disruptions from Newcastle:
Severe storms disrupted exports from the port of Newcastle with a shiploader damaged.