Asciano’s coal haulage jumps but volatility tempers the excitement
AFTER a large drop in coal-haulage volumes earlier this year, Asciano has experienced a solid pick-up over the past two months.
But Australia’s second largest listed rail company has warned the extreme volatility makes it almost impossible to give even short-term forecasts.
The chief executive, John Mullen, said the company had noticed a strong improvement in demand for coal haulage in Queensland, its biggest market, in the past two months.
‘‘[But] it is extraordinarily difficult to predict at the moment ... Queensland has been running at 30 per cent below where we should have seen it, and then suddenly we get a month that’s a record,’’ he said.
Mr Mullen said it was a challenge to plan when even Asciano’s large customers did not have a firm grip on the short-term outlook.
‘‘Into the first quarter of this financial year, it became much more erratic,’’ he said. ‘‘As a nation we talk ourselves into it so quickly. We have had investors saying, ‘Has Australia stopped exporting coal?’.’’
The head of Asciano’s Pacific National Coal division, David Irwin, said the improvement in demand seemed to be because of a ‘‘slight turn in the market’’. ‘‘It’s pretty common across all of the producers that their level of production and sales are going up,’’ he said. ‘‘It is positive ... and we hope it continues.’’
The rail operations in Queensland had experienced a drop in coal volumes of up to 30 per cent earlier this year. But in a sign of the extreme volatility, Pacific National hauled record volumes from the mines to port terminals at Mackay last month. ‘‘It shows you how quickly some of these things can swing around,’’ Mr Irwin said.
Asciano is vying with Aurizon, the rail company formerly known as QR National, for contracts to haul about 65 million tonnes of coal over the next two years for BHP Billiton Mitsubishi Alliance (BMA).
Mr Irwin said Asciano was keen to win a chunk of the new work from BMA but ‘‘we are not going to go and win business at any cost’’.
About 80 per cent of the 230 million tonnes of coal Pacific National hauls in Queensland annually is metallurgical coal, used to make steel.
The Asciano executives were speaking at the opening of a $110 million train maintenance yard at Greta in the Hunter Valley.
The ‘‘pit stop’’ for trains at Greta means less maintenance will be needed at Newcastle. This will go some way to help reduce congestion on rail lines around the city.
Asciano’s large port operations have also experienced similar swings in demand since July.