By Jo Clarke 

June 7, 2021 - Above-average coal shipments to Japan, India and South Korea from Australia's port of Gladstone in Queensland, as well as diversification into new markets, partially offset a lack of sales to China.

Trade flows continued to adjust to Beijing's ban on Australian coal imports in May, with sales to Japan, India and South Korea increasing and the tail of export destinations growing. Gladstone is the only Queensland coal port to give destination data and the May data show coal mining firms continuing to adapt to the new trade situation and diversifying their customer base. This follows a similar pattern in the Australian trade data for national exports of metallurgical and thermal coal in April.

May was the seventh successive month that Gladstone shipped no coal to China.

Shipments to Japan, India and South Korea were all higher than the year-earlier month, which might have been depressed by Covid-19 lockdowns in mid-2020. They were also significantly higher during January-May 2021 than they were in the same period of both 2020 and the pre-pandemic year of 2019, implying that the increase was not solely related to 2020 lockdowns.

Total coal shipments from Gladstone were 5.44mn t, up from 5.28mn t in April but down from 5.57mn t in May 2020, according to data from Gladstone Ports (GPCL). They were down by 5pc in January-May compared with the same period in 2020 and by 7pc from 2019.

June is usually a strong month for Gladstone coal shipments ahead of the end of the Australian financial year on 30 June, with the ship queue increasing to around 32 ships on 7 June compared with an average of around 20 ships.

Argus last assessed the premium hard coking coal price at $153.50/t fob Australia on 4 June, up from $107.75/t on 3 May but still slightly below a recent high of $157.35/t on 2 February. The PCI low-volatile price, which was higher than the premium hard coking coal price on 5 May, has not followed the higher grade higher over the past month. The PCI price was yesterday assessed at $110/t fob Australia, up from $109.35/t on 5 May.

Argus last assessed high-grade Australian thermal coal at $120.58/t fob Newcastle for NAR 6,000 kcal/kg on 4 June, up from $88.19/t on 30 April and a low of $46.18/t on 4 September. It assessed lower-grade coal at $70.10/t fob Newcastle for NAR 5,500 kcal/kg on 4 June, up from $55.44/t on 30 April and $35.04/t on 4 September.

The heat-adjusted premium on a NAR 6,000 basis for higher-grade thermal coal was $44.11/t on 4 June, up from $26.60/t on 5 March and $8.65/t at the end of August.

Hard coking coal typically accounts for around a third of Gladstone's total exports, with lower-grade coking coal and thermal coal each accounting for a third.