Asia Coal-Australia thermal coal prices at 2010 high over $120/tonne
* Australian weather concerns continue to weigh
* Hunter Valley minimally impacted by rains
By Rebekah Kebede
PERTH, Dec 22(Reuters) - Australia's thermal coal prices, a benchmark for Asia, climbed to a 2010 high over $120 per tonne this week, as rains in delay loadings and a cold snap in Europe boosted demand.
Thermal coal on the globalCOAL Newcastle index rose to a 2010 high of $123.50 for the week to date on Monday, up from $118.75 a week earlier.
Continuing concerns about the impact of wet weather in Australia as well as Indonesia pushed prices up, market sources said.
Torrential rains in Australia have soaked the northeastern coal-producing state of Queensland, forcing several companies to declare force majeure. Queensland produces mostly coking coal used for steel-making but also produces some thermal coal. [ID:nL3E6NM0CD]
Concerns about wet weather impacting the Hunter Valley in Australia's New South Wales state, where much of Australia's thermal coal exports are produced, are mounting, traders and analysts said.
The Hunter Valley Coal Chain has experienced some minor impacts from wet weather in the coal-producing Hunter Valley which has had some effect on the coal coming into the Port Waratah Coal terminal.
"There have been some routine or minor impacts due to the wet weather," said Matthew Watson, spokesman for the Hunter Valley Coal Chain Coordinator.
"There is a feeling that the minimal delays that have been experienced will be made back in due course."
The unseasonably wet weather in Australia has been attributed to a La Nina weather event which the Australian weather bureau said on Wednesday may be at its peak. [ID:nL3E6NL05I]
Indonesian producers continue to scramble to meet contracts after their deliveries were delayed by heavy rains. [ID:nL3E6NF0OG]
Australia and Indonesia's supply problems come just as producers in South America are being hit by severe weather, with one Venezuelan mine declaring force majeure early this month and more force majeures expected from major producers in Colombia.[ID:nLDE6BG1OR]
As supplies tighten, prices are expected to continue moving up.
A Japanese power utility short supplies for January recently bought coal above the $120 per tonne level for January, according to a trade source, and while offers for February tonnes climbed as high as $127 per tonne.
The Newcastle index shows tonnes for January around the $124 to $124.50 level.
The market will keep its eye on global weather forecasts to gauge if winter demand coal will be above normal levels as well as to determine if major producers will experience further supply disruptions.
Coal market watchers will keep an eye on the Hunter Valley, where much of Australia's thermal coal exports are produced. So far, the region has been minimally affected by rains, but torrential rains similar to those being experienced in Queensland could see prices hike much higher.
(Reporting by Rebekah Kebede; Additional reporting by Fitri Wulandari; Editing by Ed Lane)
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
Trending On Reuters
Barack Obama in India
In a glow of bonhomie, U.S. President Barack Obama and Indian Prime Minister Narendra Modi unveiled plans to unlock billions of dollars in nuclear trade and to deepen defence ties, steps they hope will establish an enduring strategic partnership. Read | Slideshow
- Video: Modi receives Obama at the airport
- "We have a deal" - insurance may unlock India-U.S. atomic trade
- U.S.-China climate deal does not put pressure on India, says Modi
- Obama backs India's solar goals, seeks support for climate talks
- Column - U.S. and India: Two democracies should join to balance China's rise