Coronado Global Resources has become the latest coal producer to withdraw its 2020 financial year market guidance due to the coronavirus crisis.
The pandemic has caused uncertainties around global demand and pricing of metallurgical coal. Steel producers have rationalised production due to a sharp decline in demand, notably from the automotive and construction industries.
According to Coronado chief executive Gerry Spindler, the macroeconomic impact of coronavirus presents challenging times ahead for the resources sector.
“Curragh’s major customers in India, Japan, Korea and Europe have not been immune from the downturn in steel demand and impact of lockdown policies,” Spindler said.
“However, they have continued to work with Curragh as a strategic supplier of ‘base load’ metallurgical coal for coke blends.
“Curragh has also successfully moved more coal into the Chinese market, reflecting the flexibility and quality of the product.”
Metallurgical coal took a higher proportion of Coronado’s saleable production, which was up 1.1 per cent to 82 per cent for the March quarter compared with the December period.
Coronado sold 4.5 million tonnes during the March quarter, which is 3.3 per cent lower than the volume in the previous quarter.
This is attributed to the Curragh mine’s shutdown in January when a contractor was fatally injured.
Coronado, however, achieved a run-of-mine production of 6.9 million tonnes, representing a 4.3 per cent increase compared with the previous quarter.
In the United States, the company has temporarily idled its mines since the end of March.
In spite of a contraction in demand from Coronado’s customers in Europe, Brazil and North America, sales from the American mines have continued from existing inventories of around 750,000 tonnes.