May 16, 2019 - Shipments from the Queensland port of Hay Point in Australia have rebounded strongly in the first half of May, but the nearby Dalrymple Bay Coal Terminal (DBCT) has set modest targets for the month that will at best slowly reduce the vessel queue outside the ports.

Hay Point loaded vessels with deadweight tonnage capacity of 1.71mn t in the first nine days of May, as it recovered from maintenance in April. This is the most loaded in the first nine days of a month this year and compares with 1.11mn t in April, 1.65mn t in March and 540,000t in February. It implies that the port, which is operated by the world's largest supplier of seaborne coking coal BHP Mitsubishi Alliance, is on track to ship significantly above average volumes of coal in May after weak shipments in February and April and an above average March.

The performance at Hay Point has not been matched at DBCT, where the port operator has cut targets for May to an average annualised rate of 65.4mn t/y from a target of an average annualised rate 79.09mn t/yr in April. The port missed its April target and operated at an annualised rate of around 59.3mn t/yr. It has operated slightly above target for the first half of May at an average rate of 65.4mn t/yr. But this is still far short of its capacity of 85mn t/yr and of the 69.5mn t/yr it achieved in 2018.

This means that May is likely to be the fourth below average month in a row for shipments from DBCT. It shipped an average of 4.9mn t/month during February–April compared with an average of 5.79mn t/month in 2018. It is common for shipments to be lower in this period because of the Queensland wet season. But this season has been relatively calm and officially ended last month, so the low figures seem to reflect prolonged maintenance issues.

The weak shipping activity from DBCT is keeping vessel queues outside the two ports at 46, according to shipping trackers. This is down from 53 on 1 May but still significantly above the 18-20 average prior to 2018.

The number of vessels queuing to access at DBCT fell to 33 today from 36 on 1 May, according to the port operator. This implies that the number waiting to access Hay Point has fallen to 13 from 17 over the same period.

The queue at DBCT fell to as low as 21 on 6 February before a closure because of a storm, having been as high as 56 on 10 December.

The long queues are frustrating mining firms looking to run down stocks at mines that were built up over the wet season and to monetise them ahead of the end of the 2018-19 fiscal year on 30 June. The waiting time for vessel offshore DBCT is currently three to four weeks.

Argus last assessed the price for premium hard coking coal, which is largely exported from Queensland, at $212.50/t fob Australia, up from $206/t at the start of May. It has been around $200/t for most of the past six months, up from a low of around $75/t in early 2016. This sustained higher price has led to some production creep in Queensland and the restart of some mothballed mines, which is adding to the congestion at the lower cost DBCT.

The high-grade NAR 6,000 kcal/kg thermal coal price has eased to $85.03/t fob Newcastle from $100.73/t six months ago.