Coal still booming, so trade up in Newcastle

Booming coal exports help Newcastle Port break trade records for the first half of the financial year

Booming coal exports helped Newcastle Port break trade records for the first half of the 2008-09 financial year.

The port recorded a total of 49.56 million tonnes of trade for the July to December period, 3 million tonnes more than the corresponding period the previous year.

Coal exports were the major factor, with 47.05 million tonnes exported including a record monthly total of 8.55 million tonnes in December.

But wheat exports also rose and are showing signs of recovery after a sustained period of drought.

About 27,000 tonnes of wheat were exported aboard the Energy Star liner in early December, with another 250,00 tonnes booked to leave the port on nine bulk carriers by early March.

Ports and Waterways Minister Joe Tripodi says Newcastle will cement its crown as the world’s biggest coal export port thanks to the on-going steady demand for thermal coal.

The new monthly record in December saw Newcastle topple Queensland’s Hay Point as the world’s largest coal exporter.

In 2008, Hay Point, including the Dalrymple Bay terminal, exported 83.9 million tonnes of coal, compared to Newcastle’s throughput of more than 91 million tonnes.

"Eighty per cent of coal exported from Newcastle is thermal coal while Hay Point mostly exports coking coal," Tripodi says.

"Demand for thermal coal, which is used for electricity generation, is holding up much better than coking coal, so Newcastle’s domination over Queensland’s terminals is set to continue."

Demand for coking coal, used in steel production, is declining in line with the slowing world economy, Tripodi says.

"ABARE is predicting a substantial fall in coking coal prices in 2009, while it expects thermal coal exports to increase by 7 percent on top of the 3 percent increase in 2007/08," he says.

"Based on throughput over the last six months, Newcastle Port Corporation estimates Hay Point will export 84-87 million tonnes in the 2008/09 financial year, while Newcastle should remain steady at around 91 million tonnes."

Tripodi says the projected export figures underline the importance of last year’s breakthrough agreement with the Hunter Valley coal producers, which he says guarantees access for new entrants in the industry and will see a fourth coal terminal built.

Meanwhile, Newcastle Port Corporation has lodged plans with the New South Wales Heritage Council for a multi-million dollar redevelopment of its pilot station.

The project, known as Port Centre, will involve the construction of a three-storey building on the site near the harbour entrance to provide new facilities for the Corporation’s operational activities.

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