Australia: Coal exports hammered by Cyclone Debbie - Westpac

Rob Rennie, Research Analyst at Westpac, lists down his findings by using high frequency shipping data to estimate iron ore, LNG and coal exports from Australia.

Key Quotes

“Iron Ore - Australian exports rising modestly; exports from Brazil drop

• According to shipping data, iron ore exports from Australia in April were 67mt, largely unchanged from 68mt in March. That leaves exports up 2% on a year on year basis, but up only 1% over the last 3 months versus a year ago. 
• This modest year on year growth adds support to our view that near term supply concerns are probably overblown, though we do expect supply increases to have an impact into 2018.
• Adding some weight to that view, our shipping activity measure of iron ore exports from Brazil appears to have stepped down in April, after a bumper March outcome. March saw a 20%yy rise in exports from Brazil (36mt), leaving Q1 exports up 7% on a 3myy basis. We think that pace slowed in April to just 29mt, -5%yy and just +1%3myy suggesting the bumper March outcome was driven more by data volatility.”

“Coal - Australian exports hammered by Cyclone Debbie

• Australian coal exports tumbled in April as a result of damage sustained from Tropical Cyclone Debbie. Mid month, we forecast 20.24mt of exports in April. With some signs of improvement into the end of the month, we see a slightly higher outcome of 21.6mt. 
• However, that leaves coal exports down 31%yy and down 12%3myy. April will be the weakest export volume month since March 2011, when Cyclone Yasi hammered Australian coal exports.”

“LNG - Karratha drags; Gorgon boosts

• LNG export volumes softened slightly in April to 4.1mt from 4.3mt in March. This is not because exports from new projects were soft - our models suggest a fresh record 0.75mt of exports from Gorgon in April which now has all three trains running at 85% plus capacity.
• Rather the disappointment has been in legacy production with Karratha suffering an unplanned outage that saw production impacted in April. However, production at Karratha resumed into the end of the month suggesting we should see a noticeable rise in export volumes in May.”