Australia's New Hope Corporation Tuesday reported an 11.3% year-on-year fall in thermal coal production to 2.7 million mt in the half year ended January 31.
The drop in production was attributed to the planned closure of its New Oakleigh mine and a revised production schedule at its Acland and Jeebropilly mines in south east Queensland.
New Hope exported 3 million mt of thermal coal in the period, up 9.9% from a year earlier, it said in its production report.
A third of New Hope's exports were premium low ash coal with pricing based on the JFY annual price. The rest of the exports were higher ash coal and were sold at prices based on various indices, the company said.
New Hope's CEO Shane Stephen described the current market as "the most challenging coal market environment since the GFC [global financial crisis]" and said he expected spot prices to remain soft. He put the current price around $75/mt for the Newcastle benchmark.
However, New Hope expects to weather the adverse market conditions by reducing production costs and revising mine plans at Acland and Jeebropilly to operate on a five-day roster instead of a seven-day one, he added.
"While demand for thermal coal remains firm, and in the long term high-quality Australian export coals will continue to expand their export volumes into Asia, oversupply is likely to limit any significant improvement to spot thermal prices over the medium term," Stephen said.
At New Hope's 100% owned coal terminal at Brisbane port, Queensland Bulk Handling, which is used by several coal exports, reached 4.2 million mt during August-January, which was equal to the same period in 2013.
New Hope reported a net profit of A$22.7 million ($20.75 million) in the half year ending January 31, down from A$68.8 million a year earlier.