Port upgrades running early as queue hovers on record

Long delays for coal ships at the port of Newcastle could be reduced with news that a $170m upgrade of the Kooragang coal terminal could be completed almost 12 months ahead of schedule. The port has been dealing with a near record coal queue, which was expected to drop to the early 40s by now, but could now take until March to ease. Blown out by a surge in demand during November’s shutdown for rail and port upgrades, the queue has hovered above 50 because arrival rates are matching the system’s capacity. Port Waratah Coal Services (PWCS) general manager Graham Davidson told Lloyd’s List DCN this morning (Friday, January 5) that the work to boost capacity to 102-105m tonnes could be completed by February. The upgrade was expected to wrap up by the end of the first quarter, after initially being scheduled for the second half of the year. It comes as average waiting times for the 56 coal ships off the coast have stretched to almost 20 days this month, up from about seven days during September. There were just 23 coal ships waiting off the coast for an average of almost six days at this time last year. Four months ago there were about 27 ships waiting, but the figure grew to 40 by the end of September, the highest in two years, when severe weather disrupted shipping for several days. A rush in demand from Asian customers in the last quarter of 2006, combined with scheduled rail and port upgrades in November, pushed the queue out to the mid-50s. The present queue matches the record set in March 2004 when the Australian Competition and Consumer Commission (ACCC) approved coal producers’ plans to introduce a capacity balancing system for the coal chain. The CBS was introduced in 2004 to combat the longest queue the port had ever dealt with &#8211 56 vessels waiting to load coal amidst a boom in demand. As reported in Lloyd’s List DCN in September last year, coal companies voted to scrap the port of Newcastle’s capacity balancing system starting from January 1. Mr Davidson said that he did not expect its scrapping to have a detrimental effect on the queue. The more significant factor was that the coal companies wanted to move about 8.7m tonnes of coal in November despite being told that the network upgrades would limit capacity to 6.2m tonnes. &#8220It still goes back to November when there was a mismatch of vessel arrivals,&#8221 Mr Davidson said. &#8220It added 20 to 25 ships to the queue, so whatever queue we had in November will still be there for the next couple of months.&#8221 The coal chain is expected to handle up to 8.1m tonnes in January, at an annual rate of 95m tonnes.

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