Dry bulk coal vessel freight rates rise w-o-w on weather disruptions

• Freight rates across various routes rise in the range of $0.1-1/t w-o-w
  
  
• Cyclone push coking coal prices upwards
  
  

Australia's coal export volume pressurised amid approaching cyclone in the Northeastern Australia port- Hay Point, Dalrymple Bay Coal Terminal (DBCT) and Abbot Point have paused their port operations till 28 January and are making preparation for its landfall in Queensland state. Ships off anchorage have been ordered by the ports authority to control the damage. Long queues at Gladstone port persisted, impacting vessel waiting times.

The disruptions are likely to have a significant impact on the global coal market, as Australia is the world's second-largest exporter of coal. Coking coal, which is used in steelmaking, is particularly affected, as many of the mines and ports that have been closed are major producers of this type of coal.

The Bureau of Meteorology (BoM) is tracking Kirrily's movement and expects it to weaken as it moves inland. However, heavy rainfall and flooding are still possible in some areas. The Queensland government has declared a disaster zone in the affected regions, and emergency services are on standby to assist with recovery efforts.

Australian premium hard coking coal prices increased by $4/tonnes (t) d-o-d to $330/t FOB on 24 January, 2024 amid bad weather conditions. The price rise may be attributed to concerns about potential disruptions in coal shipping due to tropical cyclone, Kirrily, off the Australian coast. Due to the cyclonic disruption no berthing is scheduled until further notice at ports Hay Point, Abbot Point, and DBCT.

Import volumes last year were also boosted by increased receipts of Indonesian and Australian coals. Australian coal imports resumed in 2023 following the loosening of Beijing's informal ban on Australian coal. Apart from the absence of Australian shipments in 2022, the low base was also because of Indonesia's month-long ban on exports, which led to fewer shipments of lower-grade coal at the start of that year.

Russian coal exports to South Korea delayed due to limited availability at far-east ports. Coal production costs in Russia rose in 2023 due to higher fuel prices and imported mining equipment and hike in other operational expenses.