Update as of April 3, 2347EST: What makes Cyclone Debbie unique is that it appeared to have relatively minimal impact to the ports and mines but it had been particularly damaging to the railway lines, especially the Goonyella line. An initial estimate by more than four market participants is that approximately 15 million mt to 20 million mt of met coal could be adversely affected because of railway disruptions. More updates in the tables below.
Cyclone has hit the metallurgical coal market once again, with Debbie entering March 27 in Queensland, the largest met coal producing region in the world.
Multiple comparisons have been made to cyclone Yasi, which hit Queensland in 2011, and caused spot prices for S&P Global Platts' Premium Low Vol coking coal to spike to its highest point at $378/mt FOB Australia on November 20, 2011.
The metallurgical coal market has proven in the last 14 years to be particularly supply sensitive.
The Cyclone Debbie also came at a critical juncture, as premium met coal prices have fallen from a high of $310/mt FOB Australia on November 18, 2016, to $151.50/mt FOB on March 24, just before the cyclone hit.
The day-to-day sequential updates suggested that Cyclone Debbie has affected the market in multiple fronts -- from the export terminals, to the railway systems to the mines itself, making any post-cyclone analysis even more challenging.
Platts has summarized some of the key impacts of Cyclone Debbie on met coal operations:
PORTSUPDATE: Haypoint is ready to receive coal as of April 3. Abbot Point is expected to resume by the end of the week, April 4 - 9. DBCT has yet to issue any indication of reopening.
|Haypoint Terminal||Main export terminal for BHP's metallurgical coals, closed since March 26; to begin shipping operations once the harbor master provides clearance as of March 31 UPDATE: Ready to receive coal as of April 3||Delay March end or early April laycan materials Impact to the market could be short-term if suspension of operations was only due to safety precautions there had been minimal material damage as coal terminals "have emerged in good condition," North Queensland Bulk Ports Corporation said March 30 Power issues at the ports remain|
|DBCT||Closed March 25, declared force majeure March 28-29|
|Abbot Point||Suspended operations March 26, cleared for shipping on March 31, awaiting official re-opening. UPDATE: Expected to resume end of week April 4-9|
|Gladstone||Only export terminal working throughout the cyclone until March 30, when it suspended operations. Recovery of operations took place on the same day.|
RAILUPDATE: All lines still down. Goonyella line is out for five weeks. Blackwater line is expected to resume operations within the next few days.
|Goonyella Line Aurizon declared force majeure on March 29Closed for five weeks||North Goonyella (PHCC) Riverside (PHCC) Goonyella (PHCC) Moranbah North (PHCC) Isaac Plains (SH) Carborough Downs (HCC, PCI) Caval Ridge (HCC) Poitrel (SH, PCI) Saraji (PHCC)||German Creek (PHCC) Foxleigh (PCI) Oaky Creek (PHCC) Gregory (SH) Moorvale (PCI) Coppabella (PCI) Burton (HCC) Hail Creek (PHC) South Walker Creek (PCI)||Railway line disruption could impact multiple and not just one mine Impact depends on whether suspension was due to safety reasons or because of operational issuesUPDATE: Railway logistics appear to be the most important factor in post-cyclone recover. Participants indicate five weeks for Goonyella line is the most critical factor that could affect met coal supply.|
|Newlands Line Aurizon declared force majeure on March 29UPDATE: Expected to resume operations in the next two to three weeks||Newlands (HCC) Sonoma (HCC)||Drake (HCC) Collinsville mines (SHCC)|
|Moura Line Aurizon declared force majeure on March 29UPDATE: Expected to resume operations in two weeks||Dawson (SH, SS)|
|Blackwater Line The only line working till March 30, temporarily closed and re-opened on March 31UPDATE: Scheduled to reopen in the next few days||Blackwater (SS, SH, thermal)||Curragh (HCC+SH+PCI)|
MINESUPDATE: Impact on the mines has been rather limited, and not as significant as the damage seen in 2011
|BHP||Suspended operations at 5 mines on March 28, 2 mines operating at "reduced levels;" begins preparations to return to production on March 31, except for South Walker Creek PCI mine. UPDATE: Crew returning to all sites, including South Walker Creek PCI mine||Impact of mine disruptions vary depending on: -how much water has seeped into the mine and whether there is flooding -whether the force majeure was declared because of rail or port issues rather than the mines itself|
|Yancoal||Declared force majeure on March 28 for Middlemount mine (PCI, HCC)|
|Glencore||Suspended operations at Collinsville, Newlands mines March 27. It was announced on March 29 that operations would resume in 48 hours. Oaky Creek, Clermont and Rolleston coal mines were operating normally.|
|Q Coal||Sonoma and Drake mines suspended UPDATE: Declared force majeure for some shipments; operations have resumed|
|Rio Tinto||Hail Creek temporary closed, according to multiple sources|
|Anglo American||Reported shipment delays for premium coals|
|Peabody||Mines on "essential services/skeleton staff until the event passes" UPDATE: Mines have "recommenced operations"|
|Jellinbah||Reports suggest mines were temporarily shut UPDATE: Declared force majeure on April 3 but have indicated issues lie in logistics, not in the mines.|
|Wesfarmers||Employees not working, staff on standby. Shipment delays reported. UPDATE: Operations recommenced at sites April 3|
|Stanmore Coal||UPDATE: Isaac Plains mines reopened|
For more updates on the impact of Cyclone Debbie on metallurgical coal markets, check out Steel Markets Daily.
This blog entry has been updated to reflect developments as of April 3, 2347 EST.