Commentary from Plamen Natzkoff, Senior Trade Expert at VesselsValue.
Heavy rains and associated flooding across much of New South Wales in Australia this week, in addition to resulting mandatory evacuations in Australia’s largest city Sydney, have caused a series of disruptions at nearby coal producing areas and ports. Based on real-time data on vessel activities, we’ve observed a sharp drop in loadings at the Port of Newcastle, the world’s largest export coal port, since Sunday 3rd July.
Over the course of the week, total exports of coal were just over 1 million tons, sharply down on the average of 3.2-3.5mt weekly exports. The Port of Newcastle, through its three coal terminals, exports predominantly thermal coal used for power generation, as well as smaller volumes of metallurgical coal used in the production of steel.
There are currently 31 Bulk Carriers with a combined capacity of 3.3mt, waiting to load off the Port of Newcastle. The disruption of coal exports over the past week has been another factor in the very tight global coal markets, currently benefiting from increased demand from Europe and elsewhere as a range of countries look to reduce their dependence on Russian gas. The benchmark coal price at Newcastle rose 6% in a week.