* Queensland floods continue to support prices
* About 3.6 mt thermal coal exports wiped out-CBA
By Rebekah Kebede
PERTH, Jan 13 (Reuters) - Australia's thermal coal prices, a benchmark for Asia, hovered near $140 per tonne as prices continued to be supported by flooding in coal-producing Queensland state.
Thermal coal on the globalCOAL Newcastle index for the week to date was $138.58 per tonne on Wednesday, up from $129.50 a week earlier as the impacts of the flooding intensified.
The index climbed to $141.25 per tonne on Monday, the highest level seen since September 2008. Recent spot prices reached $143.50 Newcastle free-on-board for prompt cargoes, traders said.
The last of the rains this week isolated New Hope Coal's Acland and Oakleigh collieries, which both produce thermal coal and helped sweep prices to $140 per tonne.[ID:nLDE70A15P].
About 3.6 million tonnes of coal may be removed from Queensland thermal coal exports, according to a report from the Commonwealth Bank of Australia (CBA).
But the overall drop in thermal coal exports for Australia will probably be larger as New South Wales miners due to substitutions between higher value semi-soft and PCI coals and thermal coal, CBA said.
Asian buyers, which receive most of the thermal coal exported by Australia have been hunting for coal to cover supply disruptions, according to trade sources. [ID:nTOE70A07H]
On Thursday, South Korea's five utilities are buying a combined up to 1.2 million tonnes of coal in the spot market for February and March to protect themselves from possible additional shipment delays from Australia. [ID:nTOE70C057]
Japanese utilities were still looking for cargoes for the first quarter to make up for the supply disruption in Australia earlier this week, according to trade sources.
Buyers have been looking to Indonesia, Colombia, and South Africa for thermal coal alternatives. But supply disruptions due to weather, especially in Colombia and South Africa, may hamper buyers' ability to get coal cargo replacement.
However, low freight rates, which have come under pressure due to the Australian floods, will work to the advantage of those seeking coal farther afield.[ID:nL3E7CD0MD]
Australian thermal coal prices, however, are likely to climb even higher.
"Even before the Queensland floods, we were in tight situation for global," said Yingxi Yu, an analyst for Barclays Capital in Singapore.
"The Queensland floods have really changed this situation and I think we might have a much tighter market in the next months," Yu said.
Wood Mackenzie said earlier this week that prices could exceed high of $197 per tonne FOB Newcastle seen in 2008.
The spot market has been made even tighter by buyers pulling a significant volume under their contracted tonnage from Australia, removing some coal that could have been destined for the spot market, according to Woodmac.
Coal markets globally will continue to keep an eye on the Queensland flooding for any indication of further rains or signs that mines may be recovering. So far there has been little indication from producers about how long mines will take to recover, but analysts said it could take as long as six months. [ID:nL3E7CC0M5]
Buyers will likely still be in the market for spot deals to replace lost cargoes from Australian thermal coal contracts that are under force majeure. (Additional reporting by Meeyoung Cho in SEOUL; Editing by Ed Lane)