Observations today: Aust. Metallurgical Oct Futures prices...

Observations today: Aust. Metallurgical Oct Futures prices fallen to US$177, not a long way above the thermal coal futures price. The queue of ships is a bit above 30 at Hay Point. Not so bad. Demurrage will be lower. Abnormal rain events can be and have occurred in July and August- there is now an El Nino event.

The royalty take/revenue by the Qld furtively socialist govt, will decline sharply. The net Sept quarter repayment due to Taurus after the US $7m catered for by the asset sale will be $US 6 m. or A$ 9 m. At 425 k tons sold (hopefully) this amounts to about A$21/ton. In the subsequent quarters till discharge it will be about A$34 /ton, as the payments will be US$9 m.
These payments were agreed in a much higher sales price environment. There is evidently a fall in steel production in the market countries, of a modest scale (excluding China who are not big in the seaborne market having their own large resources) stemming from a decline in construction demand. On the other hand there has been over 50% increase in world production this year of coking coal, likely in response to high prices a year or two ago. This is classic economics of boom and bust production cycles in steel,and thus coking coal.
The FOB price received will be critical, as will the FOB cost.

Is BCB a marginal producer? A high cost producer? I don't think so now, mine cost wise but it seems the coal price received is dependent on spot market deals. Yep. At last, the production is running smoothly, with a very low overburden rate comparative to anything experienced before. Contracted buyers like Mitsubishi are oversupplied and putting some of their contracted supply back into the spot market. The last few months market prices are way below any forecasts I have seen anywhere.

Coronado, a multinational coal miner, is winding back Bowen production as they expect problems with El Nino un-seasonal rainfall.