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Anglo Pacific Group to benefit from shipping disruption

Coking coal – shipping disruption drives pricing

● A queue of 44 vessels has built up at the Dalrymple Bay Coal Terminal in Queensland

● This is the longest queue since May 2010, when the average daily queue exceeded 60 ships

● The delays to loading started in October and stem from maintenance at the neighbouring Hay Port putting pressure on capacity at Dalrymple. This queue does not look likely to shorten in a hurry as the No.2 berth at Dalrymple is undergoing maintenance through November (up to 5 December). Meaning the loading capacity will remain constrained and the queues are likely to sustain into December and possibly not unwind until the new year

● These loading issues are driving the coking coal price (with the port handling 85Mt/yr of coking coal) and masking the effect of the Chinese steel production winter cuts. We view this as a positive for Teck, BHP (small positive) and Anglo Pacific royalty group (Coking coal exposure through the Rio Tinto operated Kestrel coal mine royalty)

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.