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Booming coal prices, China embargo to stay in 2022, says Coronado

Business

Queensland was likely to benefit from continued bumper prices for coal this year but China’s trade embargo on Australian shipments was likely to continue throughout 2022, according to miner Coronado.

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The company, which owns the Curragh mine as well as mines in the US, said there continued to be solid demand on the back of global steel production and coal shortages, which were caused by heavy rain in the central Queensland coal fields, the suspension of operations at Curragh following the death of a worker, and supply chain issues.

It revealed its December quarter prices were a 47 per cent increase over the September quarter. The Curragh mine achieved an average metallurgical coal price of $US143 a tonne for the full year, which was 51 per cent higher than 2020. In the December quarter, the average price was $US228 a tonne, 47 per cent higher than the September quarter.

It expected China’s coal embargo on Australian shipments to continue throughout 2022 and March quarter prices were likely to be the same as those achieved in December.

“Expectations are that benchmark index prices in Australia and the US will remain above historical averages thoughout 2022,” the company said in its December quarter update.

Chief executive Jerry Spindler said Coronado achieved record revenue of $US775 million for the December quarter and had a record cash balance of $438 million.

“Elevated met coal prices continue in the January and Coronado expects to further strengthen its financial position in 2022,” Spindler said.

He said China steel production would be subdued in the short term because of New Year celebrations and the winter Olympics but would return and maintain the level of US coal imports throughout 2022 while retaining the Australian coal embargo.

“Looking beyond the near term, Coronado expects met coal prices to moderate in 2022 as supply recovers and lifts in response to the current high prices but remain above historical averages for the balance of 2022,” he said.

 

 

 

 

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