By Jenny Ma

November 23, 2020 -  Australian thermal coal miners were facing issues with loading after a storm hit thermal coal shiploaders at Newcastle port on Nov. 17, sources said Nov. 23.

A few miners declared force majeure on their previous contracts due to the issue, but further details were not immediately available.

While the damage of the shiploader was still being assessed, all shipments loading out of port of Newcastle operated by Newcastle Coal Infrastructure Group, or NCIG, were affected by the storm, sources said.

Following unexpected wind speeds of 130 km/hour recorded at the Newcastle terminal around 8 pm Nov. 16 -- a historical high over the last 10 years of NCIG's operations -- a shiploader SL02 has been derailed and has come to rest in an unstable position, according to an official statement by NCIG sent on Nov. 17.

One Australian thermal coal producer has notified an event of force majeure for a thermal coal contract, according to a notification sent by the mining company to its buyer Nov. 19.

"The seller notifies the buyer of a force majeure event which may prevent, impede or delay the due performance of its obligations under the contract," the notification said.

While the damage of the shiploader was still being assessed, the Australian miner has notified all of its customers of the force majeure event as all shipments loading out of port of Newcastle operated by Newcastle Coal Infrastructure Group were affected, a source close to the matter said.

"We estimate that about half of the loading capacity in port of Newcastle is down," he added.

Port of Newcastle is a major thermal coal loading port in Australia.

Major Shippers

BHP Billiton Group, Yancoal Australia, Whitehaven Coal, Peabody Energy Corporation, and Banpu Public Company Limited are some of the major shippers from the port of Newcastle, according to NCIG's website.

NCIG provides an essential service to New South Wales coal producers, and achieving an annual throughput of 66 million mt, according to NCIG's website.

Australian coal miners loading from port of Newcastle were requesting for deferral of cargoes ever since Nov. 17, a Singapore-based source said.

"Loading is expected to be affected due to strong wind damaging the shiploader," an India-based trader said.

The major storm has also hit one of the three unloaders at its neighboring port Nov. 16, Port Waratah Coal Services' two terminals at Newcastle port in eastern Australia, impacting schedules at PWCS, sources said.

"Loading capacities at PWCS have also been maxed out, leaving miners with limited option but to declare Force Majeure," an Australia-based source said.

Stop Selling

Meanwhile, several Australian coal miners have temporarily stop selling Australian coal loading in near-term due to logistical challenges despite the strong demand emerged from India and Japan, miners said.

"Big chunks of demand were heard in Japan for cargoes loading from January to February," a trader said.

Despite the Australian coal ban in China, bids for 5,500 kcal/kg NAR Australian coal from India inched up from Nov. 20 to $40/mt FOB, up 75 cents/mt while offers were limited, several traders said.