Prices up, volume steady for Newcastle coal

AN important October benchmark price for Newcastle coal has been settled by Glencore and Japanese power company Tohoku at $US94.75 ($121), well up on the average spot price for the year of $US85 ($108).

The settlement was reported by the coal market analyst Platts, which said Tohoku was one of Japan’s biggest power companies, with 13 power stations with a capacity of almost 13,000 megawatts.

The Australian National Electricity Market, by comparison, has an installed capacity of about 47,000 megawatts, about 23,000 megawatts of that in coal.

Platts reported that Tohoku settled with Glencore at the same price in October last year, but the May 2017 settlement fell to $US84.97, reflecting a fall in spot market prices that bottomed out in April at under $US75 ($96).

Regardless of price fluctuations, the volume of coal through the Port of Newcastle continues to slowly climb, reflecting the extra capacity in Hunter and Gunnedah basin mines that was installed during the mining boom.

Gunnedah miner Whitehaven reported strong figures on Thursday, telling the market its sales were up by 23 per cent to 4.7 million tonnes for the quarter at an average price of $US91 ($116.40).

It said that China’s “coal burn” rose by 8 per cent in the past year because of strong demand for electricity and a shortage of hydroelectric power capacity.

Figures to the end of September produced by the Hunter Valley Coal Chain Co-ordinator show the port has received 121.7 million tonnes of coal, compared with 119.2 million tonnes sent to the port in the same time last year.

At this rate, the port is set to move 162.7 million tonnes, compared with the 161 million tonnes that arrived at the port last year.

To put those figures in context, the state of NSW uses less than 30 million tonnes of coal a year, the vast majority of it for power generation. The most recently available NSW government figures show that coal consumption fell from 30.3 million tonnes in 2007-8 to 23.6 million tonnes in 2013-14.