Queensland’s worst floods in 50 years may make a strong mark in world commodity market as it began to trigger the prices of several commodities up.
Australian thermal coal prices rose to the highest since September 2008 as disrupted mines, cut transport and damaged crops.
The price of power station coal at the port of Newcastle in New South Wales, the benchmark for Asia, jumped 4.5 percent to $131.80 a metric ton in the week ended Jan. 7, according to IHS McCloskey.
The rains have inundated an area the size of France and Germany shutting mines, cutting rail lines and destroying crops, with the latest downpour leaving nine people dead and more than 60 missing. Gladstone Ports Corp. Chief Executive Officer Leo Zussino said coal stockpiles at the export harbor were “extremely low.”
“There is going to be some coal scarcity that’s going to impact the global market for a little while,” Michael Roche, chief executive officer of the Queensland Resources Council, said in a telephone interview. “You’ve got to expect that clearing water from flooded pits will go on into next month. Getting back into full production will be a mine-by-mine proposition.”
The flooded region is losing A$480 million ($473 million) a week in coal exports, Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note on Jan 7. BHP Billiton Ltd., Wesfarmers Ltd. and Rio Tinto Group are among companies to declare force majeure, a legal clause that allows mines to miss deliveries...
Tough times for the industry..