Shipping delays are being reported off the Australian port of Newcastle, with bad weather leading to the longest queues since last November. Bulk carrier queues increased to 41 vessels in port of Newcastle, up from 40 the week before, according to Lloyd’s List Intelligence vessel tracking data.

“In my experience, temporary weather of this nature has its biggest impact in the short term, although it’s too soon to say for certain how much damage has been done to the rail and port infrastructure,” said Felipe Simian, chief executive of the Chile-based dry bulk operator Nachipa.

Heavy rains along Australia’s east coast earlier this month have caused the worst flooding in half a century and have slowed vessel movements into and out of the port, but operations were continuing. “High tides, choppy seas, and fog have made access to the port’s harbour more difficult over the last week, and as long as the weather remains rainy you can’t load grain into a bulker’s open hatches,” Mr Simian told Lloyd’s List.

However, the disruption is expected to hit coal shipments the most, as major flooding across the Hunter Valley region has hit the rail network. This could affect coal loadings as stockpiles are already depleted following rail maintenance on March 13 and 14. Newcastle, in New South Wales, is home to three giant coal terminals — the BHP Billiton-operated Coal Infrastructure Group facility and the two terminals operated by Port Waratah Coal Services.

Mr Simian noted that big buyers of Australian thermal coal such as Japan and South Korea should see limited effects as they are currently in the slack period between summer cooling and winter heating demand. Yet, “Indian imports tend to ramp up at this time of year as stockpiles are accumulated before the monsoons, and this means that supply is dropping, and price is increasing at just the wrong time for them.”

He said Australia-China trade tensions, compounded by China’s coal import ban, could further dampen Australia’s coking coal exports. Mr Simian is cautiously optimistic about the dry bulk market for this year and said that there were plenty of signs the market could run longer than that. “The dry bulk order book is very low, and even if the big shipbuilding nations give their yards post-Covid stimulus boosts, we’re still at least 18-24 months away from seeing a lot of new ships hit the water.”

He feels that it is too soon to predict the start of a new dry bulk supercycle but there are a couple of demand drivers that could individually sustain a supercycle which includes: global construction of low carbon infrastructure, large post-Covid fiscal stimulus, and the urbanisation and industrialisation of a major nation such as India.