THE boom earnings period for Australian coal seems to be over for the time being, with prices having slumped more than 60 per cent in a matter of weeks, and volumes down by about 25 per cent from their peaks.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Prices are still well above the long-term average, but the days of top-quality Newcastle thermal coal for power stations bringing more than $US400 ($570) a tonne are a fading memory, with the "spot price" for single cargoes falling to as little as $US160 ($238) a tonne.
Prices of lower quality coal bound for China have not fallen as far, trading at about $US113 ($168) a tonne, down from about $US150 ($211) at the higher exchange rates of a year ago.
IN THE NEWS:
- 'I barely eat': housing crisis pushing Hunter students to the edge
- 'Buck passing' state government slammed for high-speed rail backdown
- 'Misunderstood': Documentary lifts the bonnet on Newcastle's car culture
- Newcastle Show in full swing this weekend
- Offshore wind farm would be 'unreliable eyesore': Port Stephens candidate
The size of the boom is seen in federal government figures showing black coal export earnings topping $113 billion last financial year, or almost three times the $39 billion earned in 2020-21, when the market last bottomed out.
The record prices compensated for a substantial slide in volumes, which the industry says is more about supply shortages than a drop in demand.
Port Waratah Coal Services, which runs two of Newcastle's three coal terminals, published its figures this week for the first two months of 2023, showing an annualised rate of 83.6 million tonnes for the year, down by more than 20 per cent on the same time last year, when the annualised rate was 106.8 million tonnes.
A 2022 summary of the industry by the Australian Coal Report (ACR) shows PWCS exported 92.7 million tonnes last year.
The third terminal - Newcastle Coal Infrastructure Group (NCIG) - moved 45.5 million tonnes, for an annual Port of Newcastle total of 138.2 million tonnes.
This figure was more than 20 million tonnes down on the 158.8 million tonnes shipped in 2021, which comprised 112.1 million tonnes from PWCS and 46.7 million tonnes from NCIG.
These figures show present volumes are down by 25 per cent or more from their peak.
This week's ACR describes the price slide as a "long, drawn-out correction", with prices at their lowest level in two years.
RELATED READING:
"Newcastle coal last traded at similar prices in November 2021, when Australia was dealing with a pandemic; countries were signing anti-coal pledges at COP26 in Glasgow; and China was blocking its coal exports," ACR said.
"Fast forward to this week, and the landscape of the Newcastle market is radically changed, with the pandemic retreating into history, coal demand is growing, and China has again opened to Australian coal."
ACR said the industry had navigated "almost all of the recent challenges thrown at it over the past two to three years" and was in "relatively good shape, ready for the next price cycle".
To see more stories and read today's paper download the Newcastle Herald news app here.
Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
