macarthur coal feels port pain - good and bad

THE nation's biggest coking coal port, Queensland's Dalrymple Bay, is shipping at just 70 per cent capacity, resulting in huge queues of ships.

Macarthur Coal chief executive Nicole Hollows said yesterday that the Dalrymple Bay Coal Terminal was currently shipping at a rate of just 60 million tonnes a year, despite an expansion of the port's capacity to 85 million tonnes at the end of the last financial year three months ago.

Ms Hollows said the bottlenecks were mainly in the rail system.

She confirmed that even though port capacity had been expanded, the ship queues at Dalrymple Bay remained at pre-global financial crisis levels of more than 60, and that Macarthur Coal was waiting 25 days for a ship to be loaded.

The delay means miners pay shippers an extra $4 to $5 a tonne, or up to $925,000 for a ship carrying 185,000 tonnes of coal.

The Australian revealed earlier this month that the waiting time off Dalrymple was costing coal companies more than $500 million a year.

"People are ordering vessels at what the port capacity is, 85million tonnes, thinking the capacity will be there, but it is not," Ms Hollows said in Melbourne yesterday.

"It is a big issue. It does concern me that we are still only achieving 60 to 70 million tonnes now."

In July, a record 6 million tonnes of coal was shipped through the port, representing capacity of 72 million tonnes, but this had dropped back to a 60million tonne rate, Ms Hollows said.

As well as being hit by demurrage (the charge for use of a ship longer than the time agreed upon), producers were paying for their full capacity at Dalrymple Bay, she said.

Macarthur produces pulverised coal for injection into steel mill blast furnaces.

Ms Hollows said a recent surge in Chinese imports that had saved the Australian coking coal industry from another round of production cuts was probably unsustainable, but that demand would remain at high enough levels to influence seaborne markets.

"I think China is in a restocking phase," she said.

"In June they were importing between 4 and 6 million tonnes, up from about 500,000 tonnes to 1 million (a month); they'll probably go back to a couple of million tonnes."

Future coking coal demand growth would probably come from Brazil and India, and to a lesser extent China, which had the ability to ramp up its own coking coal production, she said.

Ms Hollows said that uncertainty over the Rudd government's proposed emissions trading scheme, the Queensland government's recent increase in coal royalties, and infrastructure issues, had been raised as concerns on a recent overseas roadshow.

"In New York, they say: 'Why should I invest in you? Your government's putting in a CPRS (carbon pollution reduction scheme) that they don't even know what the cost is going to be, or when, or how it's going to come into play. And other countries aren't going to have it. You can't even get over your infrastructure issues and your government changes your royalty rates'."


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From the Australian. At least they are shipping huge amounts.