Australian miners are continuing to expand coal shipments despite weak demand in China and sliding prices, with three ports in Queensland setting new export records for the 2015 financial year.
Minerals Council analysis found Australian coal exports rose 5 per cent in the past year, with new records set at Dalrymple Bay, Hay Point and Abbott Point.
Those ports take the bulk of the coking coal coming from Queensland’s Bowen Basin, where BHP in particular has ramped up production in recent years from the mines it shares with Mitsubishi.
As the lowest-cost producer in the coking coal business, BHP and Mitsubishi have been happy to increase exports on the back of two new mines – Daunia and Caval Ridge – coming into operation during the past two years.
The rising production has coincided with fading demand for steel in China, creating an oversupply of coking coal that has had prices slump 21 per cent in the past year, according to RBC Capital Markets.
Just as in iron ore, the oversupply is pushing higher-cost coking coal producers out of business, with RBC estimating 34 million tonnes of coking coal production was shut during the 2015 financial year, with much of that coming from Canada and the United States.
Since 2013, at least six Australian coking coal mines have stopped producing, with Rio Tinto, Vale, Glencore and the BHP-Mitsubishi joint venture all shutting at least one mine.
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