Coal

Coalfax
6 September 2019 | Issue 1642
Market round-up Newcastle Export Index (NEX)
AUSTRALIA – Newcastle traded a couple of times for December, via globalCOAL, this week, 30-Aug 06-Sep Change
first at US$66.00/t FOB, basis 6,000 kc NAR, and then $67.50/t FOB, both for 25,000 t clips. Spot (US$/tFOB) 61.19 62.93 1.74
These were the first reported December deals, and are valued higher than the last November Index 191.22 196.66 5.44
deals reported last week done at $65.00/t FOB. Spot (A$/tFOB) 91.03 92.31 1.28
Index 203.54 206.41 2.87
Source: IHS Markit © 2019 IHS Markit
AUSTRALIA the process of negotiating a funding plan
Peabody Energy expects third quarter to recapitalise from XCoal’s associate IHS Coal weekly markers (US$/t)
2019 financial results “to be materially Amaroo Blackdown Investments. In an 23- 30-
Aug Aug
lower than second quarter performance.” unsolicited and non-binding offer, QCoal,
Factors affecting the performance include which is ramping up production at its Indonesia (3,800 kc GAR) FOB 25.06 25.01

reduced pricing on seaborne metallurgical Byerwen coking coal operations, said it Indonesia (4,200 kc GAR) FOB 31.17 31.15
Indonesia (4,700 kc NAR) FOB 47.02 46.93
and thermal coal, with prices “lower would extend a Finance and Guarantee
Indonesia (5,500 kc NAR) FOB 59.69 57.44
than second quarter average prices,” the Facility of A$80m, which includes a
Indonesia (6,000 kc NAR) FOB 67.17 65.60
company said. Peabody said it is dealing Guarantee Facility of up to $25m, part of
Australia (5,500 kc NAR) FOB 49.26 48.31
with “demand-driven deferrals on which will be to replace a bank guarantee
Australia (5,700 kc NAR) FOB 59.00 57.75
seaborne thermal and met coal shipments, to be provided to Glencore, which owns
South Africa (5,500 kc NAR) FOB 47.72 46.47
with third quarter met coal volumes the Cook mining lease. South Africa (5,700 kc NAR) FOB 56.45 55.01
now expected to be modestly below South Africa (6,000 kc NAR) FOB 57.90 56.31
second quarter levels.” Also problematic RUSSIA Colombian (6,000 kc NAR) FOB 42.75 40.50
to third quarter results, the company Russia continues to expand its export India east coast (4,200 kc GAR) CFR 41.54 42.22
said: “A significant delay in resuming infrastructure on its eastern seaboard India east coast (5,000 kc GAR) CFR 56.03 56.84
and then ramping up production at the with plans for a 10 mt/y coal terminal at India east coast (5,500 kc NAR) CFR 61.42 61.18
independently operated Middlemount Zarubino in Primorsky Krai, Posyet Bay. India west coast (4,200 kc GAR) CFR 42.39 43.07
joint venture mine in Queensland The planned terminal is a joint venture India west coast (5,000 kc GAR) CFR 56.78 57.59
following a highwall failure and fatality in with Russian transport provider FESCO India west coast (5,500 kc NAR) CFR 60.62 60.38
late June.” The developments in Australia and Mongolian coal coking and thermal South China (6,000 kc NAR) CFR 78.76 78.28

mean earnings for Peabody’s share of the coal miner Erdenes Tavan Tolgoi. The South China (5,500 kc NAR) CFR 62.48 62.95

joint venture will be $30-$35m lower terminal will ship coal to China, South Source: IHS Markit © 2019 IHS Markit

than second quarter earnings, Peabody Korea and Japan once operational in Freight rates (US$/t)
said. “Middlemount restarted operations 2022-2023. Initial costs for the project
Load port Discharge Load Freight
in August in a new area of the mine, with are estimated at $260m. An extension (tonnage) port date
shipments resuming recently.” of Vostochny port in Nakhodka Bay on Thermal coal
the Sea of Japan, is scheduled to start New South Qingdao 1-7 16.40
Listed metallurgical coal producer operating this year, and will see capacity Wales (70,000) Sep
Bounty Mining has received a competing increase by 18 mt to 40 mt/y. Richards Bay Qingdao 1-7 20.20
proposal from QCoal to recapitalise the (165,000) Sep
company in what could potentially thwart Tigers Realm Coal endured a challenging Coking Coal
an XCoal-backed proposal to fund the first half, reporting a net loss of A$11.9 m Queensland Qingdao 1-7 14.80
acquisition and operation of Cook colliery. in January-June, widening from a loss (70,000) Sep

Bounty acquired the Cook mine from of A$4.3m in same period of 2018, on a Queensland Krishnapatnam 1 - 7 16.61
(70,000) Sep
Caledon Resources, which went under significant increase in mining related
administration in 2017, and is already in costs and transshipment. The producer Source: Affinity Shipbrokers
Australia Pty Ltd © 2019 IHS Markit

Contacts
Marian Hookham, Editor ∙ marian.hookham@ihsmarkit.com
Confidential. © 2019 IHS Markit™. All rights reserved.
IHS Markit  |  Coalfax

mined 0.22 mt of coal in the first half
from its Amaam North reserves in far east
Russia, down from 0.24 mt in the first six
months of last year.
VIETNAM
Vietnam’s electricity demand continues
to outpace considerable growth in
domestic coal production, leaving the
country increasingly reliant on imports.
Total power production was up 12% on
the year in January-August, to 152.0 TWh
from 135.7 TWh, the latest data from
Vietnam’s General Statistics Office (GSO)
show. Domestic coal output rose at the
same pace, up 12% on the year in January-
August, to 31.59 mt from 28.24 mt.
However, domestic coal supply provided
just a little over half of the country’s coal
demand in January-July, according to the
GSO and latest customs data. Vietnam
domestically produced 27.43 mt and
imported 25.39 mt in January-July, a big
jump from last year when only 12.02 mt
was imported in the same months.
TENDERS
Korea South-East Power (KOEN)
purchased Australian thermal coal
through a three-year term tender for
supplies for the Samcheonpo, Yeongheung
and Yeosu thermal power plants. Glencore
won the tender LT08, which was for four
Panamaxes (0.24 mt) of 5,600 kc NAR
min material on a Free on Board Trimmed
(FOBT) basis, sources said. Only three
Panamaxes were awarded, and it will
provide Australian material at around
$57.75/t FOB, basis 6,080 kc NAR. That
coal must have no more than 28% max
moisture, 17% max ash (air dried) and 1.0%
max sulphur. East Russian coal was not
allowed to participate. The first contract
year is October-December 2019.
FREIGHT
Freight rates across major Asian routes
continue to rise, with demand being
spurred by agricultural product exports
from South America. Shipping costs are
also being nudged up by some Cape vessels
installing desulphurising equipment to
meet the upcoming IMO2020 standards.
Capesize voyage chartering rates for the
Newcastle to South China route rose to
$16.25/t from $15.40/t last week. The
Panamax rate for the Newcastle to South
China route was around $16.90/t, up
from $16.60/t last week. Panamax voyage
charter rates from South Kalimantan to
South China were $9.20/t, up from $9.00/t
a week ago. Supramax rates on the same
route were $10.30/t, up from $9.65/t
last week.
PORTS
Australian vessel queues generally receded
this week, with rising freight rates being
a deterrent for some. The largest decline
was seen at Port Waratah Coal Services
(PWCS) terminal at Newcastle, which was
down to three vessels on Friday, from 15
vessels in the previous week. Newcastle
Coal Infrastructure Group (NCIG) was
down to two vessels, from three in the
week prior. However, the general trend
was bucked at Dalrymple Bay Coal
Terminal (DBCT), which increased to 30
vessels, from 26 in the previous week. The
average delay at the DBCT terminal was
down to 19 days, from 20 in the previous
week, as Berth 1 reopened from a month-
long maintenance closure. Along with
this, the number of vessels in the BMA-
operated Hay Point Coal Terminal (HPCT)
ship queue increased to 10 vessels from
eight in the previous week. Berth 2 is
closed from 16 August to 25 November for
maintenance. At Gladstone, queue at the
RG Tanna coal terminal fell by two vessels
to six vessels as of 6 September.

NEX® index thermal coal ($/t) Australian vessel queues and delays
Port Queue Avg. Queue Avg.
135 6/9/19 delay 29/8/19 delay
125 6/9/19 29/8/19
115 Abbot 2 2 3 9
105 Point

95 Dalrymple 30 19 26 20
Bay
85
Hay Point 10 11 8 9
75
Gladstone 6 3 8 7
65
Wiggins Is 1 6 4 4
55
Brisbane 1 1 0 0
45
Port 1 11 1 0
Kembla
Newcastle
PWCS 3 4 15 4
US$/t FOB 6,322kc NAR US$/t FOB5,500kc NAR NCIG 2 5 3 2
Source: IHS Markit, globalCoal, sources © 2019 IHS Markit Source: IHS Markit vessel-tracking
software © 2019 IHS Markit

Confidential. © 2019 IHS Markit™. All rights reserved. 2 6 September 2019

North American Export
Coal & Gas Summit
Join industry experts and
stakeholders to examine
the changing market The Westin St. Francis Hotel
San Francisco, California
fundamentals that are
shifting coal and LNG October
supply and demand 2-4
dynamics around
2019
the world.

Register Today!
https://www.opisnet.com/export-coal-gas-summit
IHS Markit Customer Care
CustomerCare@ihsmarkit.com
Americas: +1 800 IHS CARE (+1 800 447 2273)
Europe, Middle East, and Africa: +44 (0) 1344 328 300
Asia and the Pacific Rim: +604 291 3600

Disclaimer
The information contained in this report is confidential. Any unauthorized use, disclosure, reproduction, or dissemination, in full or in part, in any media or by
any means, without the prior written permission of IHS Markit Ltd. or any of its affiliates (“IHS Markit”) is strictly prohibited. IHS Markit owns all IHS Markit logos
and trade names contained in this report that are subject to license. Opinions, statements, estimates, and projections in this report (including other media) are
solely those of the individual author(s) at the time of writing and do not necessarily reflect the opinions of IHS Markit. Neither IHS Markit nor the author(s) has any
obligation to update this report in the event that any content, opinion, statement, estimate, or projection (collectively, “information”) changes or subsequently
becomes inaccurate. IHS Markit makes no warranty, expressed or implied, as to the accuracy, completeness, or timeliness of any information in this report, and
shall not in any way be liable to any recipient for any inaccuracies or omissions. Without limiting the foregoing, IHS Markit shall have no liability whatsoever to
any recipient, whether in contract, in tort (including negligence), under warranty, under statute or otherwise, in respect of any loss or damage suffered by any
recipient as a result of or in connection with any information provided, or any course of action determined, by it or any third party, whether or not based on any
information provided. The inclusion of a link to an external website by IHS Markit should not be understood to be an endorsement of that website or the site’s
owners (or their products/services). IHS Markit is not responsible for either the content or output of external websites. Copyright © 2019, IHS Markit™. All rights
reserved and all intellectual property rights are retained by IHS Markit.