Coal prices have remained buoyant for the month of August, helped along by a shortfall in hard coking coal supply, according to Clyde Henderson, principle of Sydney-based analyst company Energy Economics.

The steam coal market has broken through the June 1998 mark of US$30/t FOB for average Australian export prices. Spot steam coal prices have, however, fallen every month since March, under the pressure of rampant Chinese exports.

Henderson said Australian exporters continue to battle to hold the line on spot prices, at the cost of static export volumes, but steam coal stocks are on the rise (up 0.8 Mt in July) and spot prices have fallen to around US$30.50/t FOB Newcastle.

“Evidence emerged in late August of a bounce in spot steam coal prices, but we still expect spot prices to finish 2001 around the US$30/t FOB Newcastle level,” he said.

Meanwhile, hard coking coal prices jumped to US$53/t FOB Queensland in August, up from US$50/t in July.

Henderson said a recent tender by the Indian state owned commodity trader and coke producer, MMTC, for 1.5Mt of coking coal for three years illustrated that prices were high. BHP offered 120,000t at US$53.50/t FOB, Anglo Coal 120,000t at US$54.50/t FOB, and MIM 100,000t at US$53.00/t FOB.

“US coking coal exports fell by 7.7% in the June quarter to 6.26Mt,” Henderson said. “We had expected US exports of coking coal to bottom by now as a result of high export prices and chronic weak demand from the domestic steel industry. US high volatile coking coal continues, however, to be sucked into the domestic steam coal market and production difficulties remain at some US coking coal mines.”

In Queensland, mining problems at four longwall mines – Crinum (BHP, Mitsubishi) Moranbah North (Anglo American), Oaky Creek No 1 (MIM) and North Goonyella (RAG) have impacted on hard coking coal exports. Of the four, only the roof problem at Oaky Creek No 1 is considered serious.

Henderson said until the new thin seam longwall is commissioned in March next year, Oaky No 1 will continue to struggle. The current panel is split into two parts, 19A and 19B, by a large fault, which MIM planned to relocate around rather than mine through.

The first of a series of roof falls occurred between chocks 90 and 107 in late July 2001 after a secondary fault was intersected. The roof was grouted up with polyurethane resin and the longwall cleared of rock, but when the longwall resumed operations after a break of a week and a half, a second fall occurred, which was still being cleared in mid August.

The poor mining conditions resulted in a decision to terminate mining in 19A early and relocated to 19B. Oaky No 1 has three panels developed in advance, so the loss of part of panel 19A will not put any pressure on development rates.

BHP’s Crinum mine hit a fault during the month, but was fortunate in that it was near the end of the panel, and the fault is not present in the next panel. Output from Gregory opencast has been ramped up to compensate for the problems at Crinum. Anglo Coal’s Moranbah North also has had roof problems as well as gear problems, but production was back to normal in the last week of August.