By Jo Clarke

September 1, 2022 - Heavy rainfall is forecast for Australia's coal-producing regions for 2-3 September, adding water to saturated ground and forcing ships from anchorages just as the industry clears the backlog from the last major rain in early July.

Rain is forecast for the Hunter Valley and Illawarra regions in New South Wales (NSW), as well as the Bowen and Surat regions in Queensland on 2 September, with showers forecast in the following days. The rainfall is not expected to be as damaging as the storms that cut shipments from the NSW port of Newcastle to a five-year low in July, but it is falling on mines where water storage is already full and new capacity is still being built.

The Australian Bureau of Meteorology (BoM) has issued a strong wind warning for the Hunter and Illawarra coasts through to midnight on 2 September, and many ships have moved off the anchorage at Newcastle.

The ship queue at Newcastle has fallen to 20 from 48 on 1 August and over 60 in late July, as more benign weather in August allowed the backlog of loadings to be mostly cleared.

The BoM has warned residents of NSW and Queensland to expect a wetter than average September-November, and that it is very likely that the wet season will start earlier in Queensland than normal. The wet season typically runs from November to April and is associated with an increased likelihood of cyclones in Queensland. The BoM in August upgraded its La Nina watch for 2022-23 to an alert, increasing the probability of another wet year to 70pc from 50pc. The 2021-22 La Nina officially ended in June.

The wet weather has depressed Australia's exports of thermal and metallurgical coal at a time of high demand, particularly for thermal coal, underpinning strong prices.

Argus last assessed high-grade 6,000 kcal/kg NAR thermal coal at a record high of $433.24/t fob Newcastle on 26 August, up from $383.82/t on 1 July and above the previous peak of $425.90/t on 20 May. It assessed lower grade 5,500 kcal/kg NAR coal at $204.33/t fob Newcastle on 29 August, up from $188.73/t on 1 July but down from a peak of $287.15/t on 11 March. It assessed the premium hard low-volatile metallurgical coal price at $275/t fob Australia on 30 August down from $664/t on 15 March, but up from $199.35/t on 5 July last year.