Whitehaven Coal topped its full year coal export targets despite port congestion in Newcastle in the final months of 2017-18 which limited sales. But thanks to stronger coal prices, especially for thermal and soft coking coal, the company should report strong earnings next month.
The company said it sold 22 million tonnes of coal so – higher than the 21 million tonnes at the top end of the company’s guidance range, and higher than the 20.67 million tonnes sold last financial year. As a result Whitehaven Coal says it is on track to deliver “a record set of financials” as thermal coal prices hover at seven-year highs, thanks to strong demand, particularly from China and India.
CEO Paul Flynn said yesterday in the June quarter and full year production and saes report that record production at its Maules Creek mine in NSW and the continuing strong performance at its Gunnedah mine helped the group sales to within guidance.
"The appetite for high quality coal in the Asian region continues to grow, with India and China leading demand," the group said in its production report on Monday.
Whitehaven said Chinese power demand had increased 8.5% in the first five months of 2018, with coal-fired generation up 6% over the same period.
A colder-than-forecast winter, an early summer and strong industrial demand had driven the higher demand, while constraints on domestic coal production and distribution had lifted demand for imports, Whitehaven said.
Figures out on Friday showed that China’s coal rose 18% from a year earlier to 25.47 million tonnes in June. June’s imports also rebounded from 22.33 million tonnes in May, after traders said China relaxed customs checks to let in foreign supplies.
For January-June, coal imports rose to 146.19 million tonnes, up 10% from a year earlier, data showed and on line to top 300 million tonnes for the year for the first time.
Whitehaven said coal demand across the European Union continued to fall, but reduced supply from South Africa and Australia plus the higher Chinese demand was keeping global thermal coal prices high.
"With peak northern hemisphere demand in July and August impacting demand, prices are likely to remain well-supported in the short to medium term," the company said.
The miner produced 5.9 million tonnes of coal in the fourth quarter of 2017-18, and 22.9 million tonnes of coal for the year.
Whitehaven shares fell 1.4% to $5.48.