* Queensland rain disruptions boost thermal coal prices
* Newcastle export operations unaffected by rains
By Rebekah Kebede
PERTH, Dec 14 Australia's thermal coal prices,
a benchmark for Asia, rose to a 2010 high above $118 per tonne
during the past week, as torrential rains in the key
Queensland state disrupted output.
Thermal coal on the globalCOAL Newcastle index for the
week to date was $118.75 per tonne on Monday and the highest
since April 2008. Prices were up from $116.22 a week earlier
and up nearly $3 from $115.81 on Friday.
Although Queensland produces mostly coking coal used for
steel-making, a number of mines also produce thermal coal used
for power generation.
While the focus is currently on Queensland's Bowen Basin,
the whole eastern seaboard of Australia has been affected by
wet weather and is expected to continue being impacted as the
wet season continues, analysts said.
"Wet weather will not only affect metallurgical coal but
also thermal. And I have also heard people forecasting cold
winters in China and Europe. This fear from the demand side,
combined with supply side fears has people scrambling to make
sure their stockpiles are full," said one analyst, declining
to be identified.
Coal supplies in Australia and Indonesia, both major
exporters, will likely remain tight with producers in both
countries experiencing output disruptions due to unseasonal
"I just don't see much available in the first quarter of
next year.... as far as Indonesia and Australia goes, I just
don't see the coal," said one producer source.
Still, coal exports from New South Wales' Newcastle Port,
the largest thermal coal export port continued normally during
the past week, unaffected by the wet weather that disrupted
exports in neighbouring Queensland.
A cold snap in Europe has also continued to support
prices, but traders said this was primarily due to bullish
sentiment due to the freezing weather and coal's reaction to
moves in other markets rather than European physical need for
Prompt physical coal prices rallied by between $1.50 and
$2.00 a tonne, in line with other commodity markets, on strong
economic data from China and a rise in oil prices.
Queensland rains and their impact on coal production are
likely to dominate the headlines in the coal market.
Continuing rains could further disrupt coal production,
transport, and exports and deplete stockpiles.
Traders will also keep a close eye on European winter
weather, which has played a major role in lifting prices in
(Reporting by Rebekah Kebede; Editing by Manash Goswami)