Yancoal Australia's metallurgical coal sales jumped 36% year on year in the October-December quarter to 3.21 million mt, after it bought Rio Tinto's Coal & Allied business, the company said late Friday in its quarterly report.
It was the first full quarter of production with the Hunter Valley Operations and Mount Thorley Warkworth mines under Yancoal management, after the company bought the assets from Rio Tinto on September 1, 2017, for a total consideration of $2.69 billion.
Meanwhile, fellow Australian miner Whitehaven Coal, which also released its quarterly results last week, has flagged some difficulties in selling its uncommitted metallurgical coal volumes.
Its equity sales of Australian metallurgical coal slid 28% year on year to 623,000 mt over October-December, according to the report. It cut its total saleable coal production guidance on a 100% basis for fiscal 2017-2018 (July-June) from 22 million-23 million mt to 20.50 million-21 million mt, the company said.
Production issues at its Narrabri mine, such as changing roof conditions, fed into the decision to lower the guidance, the miner said, while its Maules Creek mine faces some issues with sales.
"Sales of contractually committed metallurgical coal from Maules Creek for the first half of the [2017-2018 fiscal] year performed as expected. However, demand by steelmakers for uncommitted semi-soft coking coals has been subdued, due to high steel demand providing the ability of steelmakers to pass on increasing costs of hard coking coal," Whitehaven said.
Those factors have encouraged steelmakers to maximize coke ovens productivity and use higher proportions of hard coking coal in their coke blends, it said.
"While steel margins and steel demand continue to be robust, we expect sales of uncommitted metallurgical coal from Maules Creek will be challenging," it said.
Whitehaven added that buoyant steel demand, attractive steel margins and strong thermal coal prices, which have combined to limit the incentive for steel producers to procure additional semi-soft coking coal, has also given coal producers little incentive from a sales margin perspective to switch from high quality thermal coals into incremental semi-soft volumes.
Whitehaven achieved an average of $113/mt for its metallurgical coal in the December quarter, which was up from $104/mt a year earlier and $109/mt in the July-September quarter.
The company also noted that the potential for weather-related disruptions in the Australian state of Queensland in the next two quarters is expected to result in continued price volatility.
