Top coal exporter misses the boat
Saturday, 17 November 2007
Peter Smith
AS oil prices have surged, so have those for coal. However, the rise has come at a bad time for Australia, the world's largest exporter of coal.
Infrastructure bottlenecks, congested ports and freak weather have held back its exports even as demand for coal, driven by the energy and manufacturing requirements of China and other fast-expanding economies, has never been higher.
Weaker supplies of Australian coal on to the global market have helped raise prices. The value of Australian coal exports jumped 43 per cent to a record A$24.5bn ($22.7bn, euro15.5bn, £10.8bn) in 2005-06 but, in spite of a surge in prices this year exports fell to A$22.5bn in 2006-07, according to government figures.
Australia is the world's fourth-largest coal producer, behind China, the US and India. However, it exports more coal than any other country, and substantially more than Indonesia, the world leader in thermal coal, and Russia.
Doug Holden, the external relations manager at the Australian Coal Association, said Indonesia, Canada, east European countries and South Africa had stepped up their expansion efforts but that the surge in demand had caught a lot of people off guard.
"The ships sitting off the [Australian] coast are a reflection [of that]," he said.
The port of Newcastle, the largest coal export terminal in the southern hemisphere, was hit this year by freak weather that left 70 ships queuing off the coastline when the bulk carrier Pasha Bulker ran aground.
The queues are now down to the "high 30s", said Keith Powell at the Newcastle Port Corporation.
Newcastle still managed to export a record 80.8m tonnes of coal in 2006-07, although that was an increase of just 500,000 tonnes on the previous year.
An estimated 2.5m tonnes of coal exports were lost as a result of the June storms and flooding, which damaged rail infrastructure and port facilities and restricted traffic into the port.
Mr Holden said the volume of Australian exports, 245m tonnes in 2006-07, should grow by 5.0-8.0 per cent in the coming years. Newcastle, for example, predicts that its coal exports will grow by 10m tonnes next year, after a similar rise over the previous five years.
However, if will be some time before infrastructure bottlenecks disappear. A third coal terminal being built at Newcastle will substantially increase the port's capacity but is expected to be completed only by 2010.
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— FT Syndication Service
AS oil prices have surged, so have those for coal. However, the rise has come at a bad time for Australia, the world's largest exporter of coal.
Infrastructure bottlenecks, congested ports and freak weather have held back its exports even as demand for coal, driven by the energy and manufacturing requirements of China and other fast-expanding economies, has never been higher.
Weaker supplies of Australian coal on to the global market have helped raise prices. The value of Australian coal exports jumped 43 per cent to a record A$24.5bn ($22.7bn, euro15.5bn, £10.8bn) in 2005-06 but, in spite of a surge in prices this year exports fell to A$22.5bn in 2006-07, according to government figures.
Australia is the world's fourth-largest coal producer, behind China, the US and India. However, it exports more coal than any other country, and substantially more than Indonesia, the world leader in thermal coal, and Russia.
Doug Holden, the external relations manager at the Australian Coal Association, said Indonesia, Canada, east European countries and South Africa had stepped up their expansion efforts but that the surge in demand had caught a lot of people off guard.
"The ships sitting off the [Australian] coast are a reflection [of that]," he said.
The port of Newcastle, the largest coal export terminal in the southern hemisphere, was hit this year by freak weather that left 70 ships queuing off the coastline when the bulk carrier Pasha Bulker ran aground.
The queues are now down to the "high 30s", said Keith Powell at the Newcastle Port Corporation.
Newcastle still managed to export a record 80.8m tonnes of coal in 2006-07, although that was an increase of just 500,000 tonnes on the previous year.
An estimated 2.5m tonnes of coal exports were lost as a result of the June storms and flooding, which damaged rail infrastructure and port facilities and restricted traffic into the port.
Mr Holden said the volume of Australian exports, 245m tonnes in 2006-07, should grow by 5.0-8.0 per cent in the coming years. Newcastle, for example, predicts that its coal exports will grow by 10m tonnes next year, after a similar rise over the previous five years.
However, if will be some time before infrastructure bottlenecks disappear. A third coal terminal being built at Newcastle will substantially increase the port's capacity but is expected to be completed only by 2010.
..........................................
— FT Syndication Service