DEMONISED BUT IN DEMAND: Although political agitation against fossil fuels has risen during 2016, the Port of Newcastle is on track for another record year of exports. Picture: Darren Pateman.COAL exports through the Port of Newcastle are on track to eclipse the tonnage totals set in 2015, with the added financial benefit of substantially higher “spot’ prices flowing through to longer-term contract prices.
The latest figures from industry sources including the Hunter Valley Coal Chain Co-ordinator show that Port Waratah Coal Services, operator of two of the port’s three coal loaders, and Newcastle Coal Infrastructure Group, operator of the port’s thirdand newestcoal loader, are both on track to lift their exports this year.
Together, the three loaders should move about 161 million tonnesthis year, up from 158 million tonnes in 2015 and a record 159 million tonnes in 2014.
On average about 85 per cent of Hunter coal exports are sold as thermal coal for power stations, with the highest quality 15 per cent sold as higher-priced coking for use in steelmaking.
In the latest Summer edition of the CFMEU journal Common Cause, union economist Peter Colley wrote that coal prices had risen dramatically this year, “surprising everyone” and showing “how little most players in the industry actually understand the supply and demand situation”.
“Ultimately it seems to boil down to changes in direction from the Chinese government, which is not a good place in which to be,” Mr Colley wrote.
He said big increases in “spot” prices had flowed intolonger-term contract prices.
Glencore had set a benchmark thermal price in October of $US94.75 a tonne ($A126 at the time), with Peabody striking a hard coking coal benchmark for Queensland coal of $US200 ($A267 at the time).
Noting that coal companies had cut costs substantially during the tough recent years, Mr Colley said that if prices stayed about $US75 ($A104) a tonne for thermal coal and $US120 ($167) there would be “a major turnaround for the industry”.
“The companies will mostly be profitable and many will be very profitable,” Mr Colley said.
Threecoalmining applicationswere finalised in lead-up toChristmas, with the NSW Department of Planning signing-off on minor changes at the Bengalla, Integra underground and Wambo mines.At Hunter Valley Operations, Coal and Allied wants to fill a hole at the mine with waste coal “fines” rather than rock overburden, as was the original plan.
“Thecurrently approved option, the Carrington out-of-pit fine reject emplacement, must be deferred as the cost of construction and operation is not feasible in the current economic climate and market conditions,” the company wrote in its November application.