Interest in Australia’s metallurgical coal (met coal) has enjoyed a significant increase in recent times, as South Korea, Japan and Europe pounce on the popular resource.
The driving demand is set to see Australia’s exports rise from 171 million tonnes in 2020–21 to 186 million tonnes by 2022–23, with tight worldwide supplies advancing Australian exports.
Prices for hard coking coal hit a new peak of $US400 ($539) free on board (FOB) per tonne in September, solidifying Australia’s reputation for producing a high-quality hard coking coal product.
Austmine commissioned a report exploring the current met coal boom. The Bede Boyle report suggested that supply chains disrupted by China’s informal import restrictions have been largely reorganised, with no overall impacts on volumes.
“Australian coal demand has risen significantly in South Korea and Japan. European importers have also sought greater access to Australian supply, seeking to capitalise on its lower price relative to US supply,” the report stated.
“Higher demand from India is expected to add further to pressure on Australian exports with buyers in Japan, South Korea and Taiwan also expressing interest in greater supply in the December quarter.”
The surge can also be put down to COVID-19, with the pandemic disrupting supply chains across the world in 2020.
“Much of the recent surge in metallurgical coal demand is ‘pent-up’: caused by the closure of significant steel and automotive making capacity over much of 2020 due to COVID,” the report continued.
The Bede Boyle report suggested the booming demand for Australian met coal will benefit emerging projects.
The likes of Vitrinite’s Vulcan coal operation in central Queensland, Whitehaven’s interests in NSW and Queensland, and MetRes and M Mining’s Millennium coal mine are just a few of the mines set to profit from the jumping desire.