South African miner Exxaro Resources expects thermal coal exports for the first half of 2014 to be higher than the previous aim of 4.5 million mt, it said Thursday in a coal commodity review before the close of the January 1-June 30 period.
It did not give its estimated export figure, but Exxaro finance director Wim de Klerk said a detailed account of the company's performance would be provided in its half-year financial results to be released August 21.
The miner noted that state logistics company Transnet Freight Rail's rail rate for January-May had been 60.6 million mt/year, despite a week-long power outage that hit railings to Richards Bay Coal Terminal in February and the annual 10-day May rail line maintenance stoppage.
Exxaro also said it expected marginally higher production for the half-year compared to H1-2013, due to increases at the Matla, Grootegeluk and Leeuwpan mines.
It believed, however, that the six-month production would be slightly lower than the July-December 2013 period, due to lower take-off from the Matimba power station of Grootegeluk coal, production stoppages at Matla, lower production at Inyanda and the sale of the New Clydesdale Colliery to Universal Coal.
Exxaro said it presumed thermal coal sales for H1-2014 would have been boosted on the year and be on par with H2-2013 due to higher buy-in volumes, while metallurgical sales were expected to climb compared to the January-June and July-December periods on improved allocation of export trains from TFR.
It noted that the global thermal and metallurgical coal markets were oversupplied, describing some of the supply-side factors as "structural."
"This may even prolong the current imbalance between supply and demand, and pricing is forecast to be generally flat for the rest of the year," Exxaro noted.
The miner predicted that sales to state utility Eskom for January-June 2014 would be stable on the year, but lower than the previous six months due to "fewer units running at Matimba and difficulties at Matla."
It said it expected the domestic South African market to end the six-month period slightly lower on the year, however, it added that, "the domestic coal market segment Eskom demand is stable. The demand from the metals, domestic steam and reductants segments is robust and remains a core focus area for the coal business."
