more queuing at dalrymple bay

See comments at bottom of article. Good timing for BBI and their DBCT negotiations. The recently completed expansion looks like it will be at full capacity straight away.


"MACARTHUR Coal has cautiously signalled better times for coking coal producers, saying European demand has begun to return to a market already buoyed by surprise demand from China.

The Brisbane-based miner said it made record coal sales of 1.48 million tonnes in the June quarter and reduced the proportion of its output it sold as lower-priced thermal coal.

It has also restarted production that had been idled in response to the global economic crisis, temporarily employing about a quarter of the 180 staff and contractors it had shed.

"Macarthur Coal is observing an improvement in shipping requests from its traditional customers seeking coal for delivery in the second half of the calendar year," the company said yesterday.

Before the global slowdown, Macarthur sold its pulverised injection (PCI) coal for blast furnaces in Europe, Japan, Korea, Taiwan and Brazil.

European steel mills, hit hardest by the global slump, were providing a big portion of the increase in demand, Ian McAleese, Macarthur's general manager of corporate development, said yesterday.

ArcelorMittal, the world's biggest steelmaker and Macarthur's major customer, has announced the reopening of four of its 25 European blast furnaces in the past month, after previously running on nine.

In the second quarter, China was a surprise saviour of many coking coal producers as mine closures there for cost and safety reasons turned the world's biggest producer of the steel making raw material into a net importer.

Illustrating the extent of Chinese demand growth, 57 per cent of Macarthur's fourth-quarter sales went to China, compared with not a single tonne a year earlier.

Producers are unsure whether Chinese demand can be sustained, with higher spot prices for coking coal now at a level that is starting to see mines there reopen.

Macarthur said it had restarted idled excavators at both the Coppabella and Moorvale mines in Queensland.

At Moorvale, about 22 former Macarthur workers have been rehired on temporary contracts, and about the same number have been put on at Coppabella by contractor Leighton Holdings, Mr McAleese said.

"While these signs (of increased demand) are encouraging, Macarthur Coal will continue to monitor ongoing demand from all of its customers to assess whether the improved outlook for coal markets is sustainable," Macarthur said.

Macarthur said it expected the ship queue at the Dalrymple Bay coal terminal to grow over the the next few weeks and the waiting time to reach a range of 15 to 25 days, which will increase demurrage costs in the second quarter.

Full-year coal sales of 4.6 million tonnes were at the lower end of recently upgraded guidance of 4.5-4.8 million tonnes because of bottlenecks at Dalrymple Bay, Mr McAleese said.

Macarthur raised $62 million through a share purchase plan following a recent $190m institutional placement.

Mr McAleese said there was no scale-back on the share purchase plan, partly as a result of uncertainty about how long the increased demand will hold up.