The key Goonyella coal rail system in Australia's Queensland state is now expected to reopen April 26, about one and a half weeks earlier than previously advised, operator Aurizon said Tuesday.
The rail system, which carries Australian premium coking coal and PCI material from the world's largest metallurgical coal supply basin to port, was shut in early April due to severe weather in the wake of Cyclone Debbie.
It was previously expected to reopen five weeks from April 3 -- around May 8 -- but is now scheduled to recommence next week with speed restrictions and reduced capacity, Aurizon said.
The system connects to the key coal exporting terminals of Hay Point and Dalrymple Bay.
All four of Aurizon's Central Queensland Coal Network systems closed in the wake of the cyclone. Goonyella is the only one yet to reopen.
The Blackwater coal system, which connects to the Port of Gladstone, reopened to coal traffic April 10, the Moura system, also to the Port of Gladstone, on April 12 and the Newlands system into the Abbot Point Coal Terminal on April 13.
Several market participants said the Goonyella reopening was groundbreaking news that could have an impact on market psychology and spot prices.
"This is very good news," one steelmaker said Tuesday. "People will start viewing things differently." The second wave of re-stocking that was previously forecast might not happen, the source added.
An Indian steelmaker agreed, saying: "I had imagined some panic buying would start end April because there would be a shortage of cargoes. With this news, panic will be reduced."
"Psychologically, this is good news. It may relieve some burden on steelmakers to secure replacement coal," a Northeast Asian steelmaker said.
All three buy-side sources said spot prices could stabilize or start to gradually decline.
Platts Premium Low Vol FOB Australia was assessed up $2/mt at $304/mt FOB Monday. Premium coal prices have doubled since Cyclone Debbie, with spot prices at $151.50/mt FOB Australia prior to the cyclone on March 24.
The closures of Aurizon's Central Queensland Coal Network systems will reduce its above rail coal tonnes for fiscal 2016-2017 (July-June) by 12 million mt-14 million mt, the company said Monday.
"Accordingly, Aurizon now expects a coal haulage range of 190 million-200 million mt, rather than the previously advised guidance of 200 million-212 million mt," it said.
Below rail volumes carried by all rail operators on CQCN will be reduced by 19 million-21 million mt, it said.
