Mon, February 26, 2018 9:43 am

Severe Weather Hampers Coal Transport: Following this week’s severe weather that resulted in coal transport service disruptions on the Central Queensland Coal Network operated by AurizonDTC is monitoring the weather at key points on the Goonyella and Blackwater corridors. Australia’s Bureau of Meteorology as of Monday afternoon local time had forecast for Tuesday through Thursday at Moranbah a 70% or greater probability of rain for each day, but with diminishing rainfall each day. In the US, the latest report issued on Friday from American Commercial Barge Line indicates a plethora of issues across much of the US inland river system. On the Ohio River, fleets and docks were shut down and that has impacted movement throughout the system which are expected to last 2-3 weeks. On the lower Mississippi and in the Gulf, high water resulted has reduced tow sizes. Further clarification of the impacts on coal shipments should be made more apparent this week and we will pass along updates to our clients as we receive them.

Previous coverage:

Inland Waterway Issues: The latest report from American Commercial Barge Line indicates a plethora of issues across much of the US inland river system.

  • Ohio River: Many fleets and docks are shutdown up and down the river. Slow transits expected throughout the river. An additional 2”-6” of rainfall are in the forecast through this weekend will cause the river levels continuing to rise. Do not expect returning to normal conditions for at least 2-3 weeks. Beginning to see bridge clearance issues in Cincinnati, not expected to crest for another 7-10 days. River levels in Cincinnati are expected to approach 60’, which will be around the 20th highest in history.
  • Tennessee River: Chickamauga Lock (TR 471) is closed due to high water, do not expect them to open until this weekend at the earliest.
  • Cumberland River: Cheatham Lock (CR 148) is expected to close today for high water, expect intermittent closures through the middle of next week
  • Illinois River: Operations suspended due to high water/high flows Starved Rock (IR 231) through Chicago. Expect limited movement to begin in the Lemont/Chicago area over the weekend. Dresden Lock (IR 271), Marseilles Lock (IR 245), and Starved Rock Lock (IR 231) are all currently closed, do not expect to resume operations through this area until at least 3/2.
  • Lower Miss/Gulf: High water has resulted in reduced tow sizes NB and SB, expect this to continue for the foreseeable future. Baton Rouge is not expected to crest until the middle of March around 40’. New Orleans is not expected to crest until the second half of March around 15’.
  • Who Could Be Affected?
    • ILB ProducersARLPMurray/Armstrong, and FELP who barge coal to export and utilities. Additionally, some Western Bit coal is barged down the lower Mississippi to export along with some PRB coal that is delivered to utility consumers on the waterway. Foresight does have a rail option to Convent Marine Terminal.
    • Utilities: A quick search provided the following utilities who receive coal via the rivers listed above. AES, Alcoa, American Electric Power, ArcLight Capital Power, Duke, Dynegy, East Kentucky Power, First Energy, NRG, PPL Corp, Tennessee Valley Authority and Vectren.
    • Steel PlantsS. Steel’s Clairton coke plant receives all of its coal via barge. For railed supply coming out of SWV and transloading onto barge on the Ohio River at KRT, delays are possible.

Central Queensland Storm Disrupts Coal Transport: Severe thunderstorms and damaging heavy winds were part of a suspected super cell on Feb. 19 that has left thousands of homes without power as in the center portion of the state. As the storm passed over on Tuesday night, the airport at Moranbah recorded wind gusts of approximately 65 MPH. Platts reported that rail operator Aurizon (ASX: AZJ) had suspended operations on its Goonyella system for 12 hours until 18:00 local time on Feb. 20 due to signaling and electrical failures stemming from the storm. West of Coppabella, the Goonyella system remained shut down as track inspections were expected to continue. A similar traffic embargo and inspection process is also underway on the Minerva branch of the Blackwater system, with localized flooding hampering assessment efforts. The storm also resulted in train cancellations on the Newlands line to Abbot Point and the Blackwater/Moura lines to Gladstone. There has not been an immediate reaction from buyers, according to Metal Bulletin, though the market remained quiet given the absence of Chinese buyers, who are celebrating the week-long Lunar New Year holiday. China’s Dalian Commodity Exchange reopens Feb 22. It is worth noting that the storm’s impact was mitigated to a certain extent, as a 12-hour maintenance outage was previously scheduled for Feb. 21 on the Goonyella system; this maintenance work went ahead to the extent possible given the restrictions on the line.

Other headlines from this week’s Week Ahead Flash include:

China Thermal Coal Stocks Recover Following Holiday Break

India Opens Coal Mining to Private Firms

Heavy Smog Hits Qinhuangdao Port

Coking Coal Prices Unswayed by Weather in Australia

Weekly Seaborne Thermal Prices Surge

Natgas Prices End the Week Up on Midweek Bump

Moderate US Cold to Displace Warmth

Global Crude Steel Flash/Monday

T Parker Host Export Flash/Monday

EIA Gen and Inv Flash/Monday

Utilities Talk Taxes as Earnings Season Wraps

Please contact Vicky Bray for further information and/or a complimentary trial (vbray@doyletradingconsultants.com; +1.970.241.1510)