Export volumes of coal from the Port of Gladstone in Queensland, Australia, to China and Japan were strong in October versus September, while the total volume from the port was steady, Gladstone Ports Corporation data showed Monday.
China was sent 1.21 million mt of coal during the month, up 39% year on year and 32% higher than in September, GPC data showed.
"Demand for metallurgical coal has been strong in recent months -- with Chinese steel output rising to record levels in July through August," National Australia Bank said last week in its Minerals & Energy Outlook.
"However, the capacity closures between November and March should substantially lower steel production -- and with it demand for metallurgical coal -- during this period," it added.
The longer term outlook is also weaker, given a flat to falling profile for Chinese steel demand, NAB said.
Exports to Japan from Gladstone port were at a five-month high in October with 2.11 million mt, up 4% year on year and 11% higher than in September, the GPC data showed.
Exports to India, meanwhile -- which had been running in a range between 1.43 million mt and 1.91 million mt over June-September fell back 26% month on month to 1.04 million mt in October. The volume was still 5% stronger year on year.
Shipment volumes to South Korea stood at 795,000 mt, up 42% year on year and down 13% month on month. Exports to Taiwan in October were 140,000 mt, down 76% year on year and down 25% month on month, the GPC data said.
Total coal exports from the metallurgical coal dominant port of Gladstone in October were 5.79 million mt, an 8% increase from a year earlier and 2% lower than the volume shipped in September.
"Australia's exports of metallurgical coal are gradually recovering, following the disruptions caused by Tropical Cyclone Debbie in late March," NAB said last Thursday.
For the first eight months of 2017, Australia's total metallurgical coal exports were 11.2 million mt, a year-on-year fall of 9%, it said.
"We expect exports to recover in 2018 -- back towards the levels recorded in 2016, however, China's steel outlook will constrain further growth," it said.
The slowdown in Chinese metallurgical coal imports is expected to make spot prices retreat next week, with NAB forecasting the October-December contract price to drop to $160/mt, from $189/mt in July-September, and to fall to around $100/mt by the end of 2018, it said.
Approximately 70% of coal handled at the Port of Gladstone is metallurgical coal, with the remaining 30% being thermal, GPC said.
