Whitehaven Expects Unimproved Thermal, Met Coal Prices for 2015

Whitehaven Coal Ltd. (ASX:WHC) released its March 2015 quarterly production report, noting that its Maules Creek operation produced 1.1 million tonnes of coal during the period, achieving a production rate of 6 million tonnes per year in March.

Furthermore, the company said that construction at Maules Creek was 93 percent complete at the end of March.

Other highlights include:

• Completed refinancing of debt facilities at a lower interest rate with term extended until July 2019. 
• Narrabri continues to create new production records with 2.2Mt ROM coal produced in the quarter.
• Full year production from Narrabri upgraded to a range of 7.0Mt to 7.2Mt.
• Managed coal sales of 3.7Mt, a new quarterly record, with sales from Maules Creek included for the first time.
• Managed saleable coal production of 4.1Mt for the quarter.

The press release also states:

During the March quarter, the benchmark Newcastle thermal coal index (GlobalCOAL NEWC Index) averaged US$65.82/t, a 3% increase from the previous quarter. Whitehaven achieved an average price for all its export thermal coal sales of US$65.37/t for the quarter.

The key JPU thermal coal benchmark price settled at US$67.80/t earlier this month, about 17% lower than the previous JPY settlement. The outcome was significantly higher than the prevailing spot price.

Chinese demand for imported thermal has fallen during the first three months of this year following the introduction of regulations aimed at supporting domestic coal production in China. Production cuts are occurring with Glencore announcing a reduction of 15Mtpa in February and Shenhua cutting 33Mt of Chinese domestic production. Whitehaven expects the thermal price to remain around current levels for the balance of this calendar year.

The Q2 hard coking coal price settlement by BHP Billiton of US$109.50/t was below market expectations and the Q1 settlement of US$117.0/t. While over 25Mt of production cuts have been implemented across the global industry, these have not returned to the market to balance. Whitehaven expects that metallurgical coal prices are unlikely to improve until 2016.

Click here to read the full Whitehaven Coal Ltd. (ASX:WHC) press release.