Newcastle coal exporters at the Port Waratah Coal Services terminals in eastern Australia shipped their largest monthly volume of cargo to India in February at 383,000 mt, compared to India's nil offtake in January, according to a Platts analysis of PWCS shipping data, Tuesday.
Indian buyers apparently stepped in last month to fill some of the gap left by Chinese buyers absent for the Lunar New Year holiday in China in mid-February.
The volume shipped to India by PWCS coal exporters such as Glencore and Rio Tinto last month represented 4.24% of the terminal operator's total throughput for February of 9.05 million mt, according to a PWCS operating report for last month.
India's offtake volume in February is the largest recorded by Platts which has been tracking shipment volumes at the PWCS terminals since January 2010.
Ninety percent of the PWCS coal terminals' shipments in February was thermal coal, equating to 8.14 million mt, and 10% was coking coal and equivalent to 905,000 mt. LOW PRICES, FREIGHT
A combination of low spot market prices for Newcastle 5,500 kcal/kg NAR thermal coal, cheap vessel freight rates from eastern Australia to India, and a lack of competition from Chinese buyers, helped to fuel demand for this grade at the PWCS terminals from Indian buyers.
In January, spot market prices for this grade of thermal coal averaged $39.80/mt FOB Newcastle, and freight for Panamax ships on the eastern Australia to India trading route ranged between $5/mt and $6/mt over the later part of January and early February, according to Platts prices.
Australian coal producers at the PWCS terminals in Newcastle port have been trying to diversify their customer base in the face of retreating demand from China, which slipped to an offtake of only 790,000 mt in February, though this was up on 580,000 mt in January.
India is one new market for Newcastle thermal coal, however, it is growing from a very low base.
The South Asian country booked only 1.24 million mt of PWCS coal exports in 2015, compared with 958,000 mt in 2014, according to PWCS shipping data. DWINDLING CHINA OFFTAKE
China's offtake of coal exports from the PWCS terminals at Newcastle port dwindled to 12.96 million mt last year, from 25.3 million mt in 2014, and 24 million mt in 2013, according to PWCS shipping data analyzed by Platts.
Smaller emerging coal import markets such as Thailand, Malaysia and Mexico have been gradually increasing their offtake volume from PWCS coal shippers and this is helping to offset some of the declining Chinese demand.
Thailand-based customers took delivery of 355,000 mt of coal exports from the PWCS terminals in February, and Malaysia was a destination for 217,000 mt last month, said the PWCS report.
A traditional market for PWCS coal exports is Japan, which booked 4.34 million mt of cargo at the Newcastle terminals last month, up marginally from its offtake of 4.19 million mt in January.
South Korea was a buyer for 1.2 million mt of coal exports last month at the PWCS terminals from 1.7 million mt in January and, Taiwan booked 1.42 million mt in February, up from only 400,000 mt in January, PWCS shipping data showed.
The Newcastle Coal Infrastructure Group terminal, with a capacity for coal shipments of 66 million mt/year at Newcastle port, declined to release any information on its shipment destinations or tonnage throughput.
