Australia's Fitzroy declares force majeure on coking coal due to weather-related logistical issues

Australian miner Fitzroy Coal Sales Pty Ltd has declared force majeure on its coking coal supply following wet weather issues affecting port logistics at Dalrymple Bay Coal Terminal (DBCT), according to a company notice seen by Platts, part of S&P Global Energy, Jan. 13.

The notice, issued Jan. 12, and with its FM effective from 2045 hours (Australian time) Jan. 6, was following an earlier DBCT initiation of its own force majeure notice which advised that from the same timing and date, its berthing operations were affected due to deteriorating weather conditions.

Fitzroy was not immediately available for comment.

The force majeure does not appear to cover all loadings, however, with an international trader telling Platts that although they had a couple of Carborough Downs cargoes contracted, including one that has just loaded this month, they had not received any force majeure notification.

"[Ex-tropical] Cyclone Koji is causing heavy rainfalls in eastern Australia," a Singapore-based trader said. "This has caused up to 200 mm of rainfall at certain areas there, and some roads are underwater. Of course, transportations via trams and rails are expected to face issues."

Another Singapore trader expected that the heavy rains in eastern Australia may be likely short-lived as earlier forecasts were just for the current week, noting however that the timing unfortunately coincided with February laycan demand from India coal buyers beginning to emerge.

"Seems that other miners in the Emerald, Queensland regions are also facing wet operations, ground is likely turning muddy for them to mine," the first trader added.

Ex-tropical Cyclone Koji was forecast to weaken further and move westwards according to the latest forecast from Australia's Bureau of Meteorology on Jan. 13.

Fitzroy operates several mines in the Bowen Basin, with Carborough Downs hard coking coal heard to be affected by market participants. The company also operates the Iron Bark No.1 and Broadlea mines. Its products are transported by the Goonyella rail line to DBCT.

"Given a couple of hard and semi-hard coking coal miners have issued FM, and including the earlier mining accident at Curragh, supplies of second-tier coal have been disrupted," a Chinese trader said, noting potential support for coal prices in the near-term.

Platts assessed premium low-vol hard coking coal up $1.60/mt day over day to $228/mt FOB Australia on Jan. 13, while the low-vol hard coking coal price was assessed higher by $2.70/mt day over day at $181.50/mt.