Coal prices leap 25%, reaching record level
Power-station coal prices at the NSW port climbed $US23.09 ($A25.46) to $US116.44 a tonne last week, the second straight week of record prices, according to the globalCOAL NEWC Index. Coal rose 73% in 2007. China, the world's largest producer and consumer of coal, will halt exports until April after the worst snowstorms in 50 years disrupted output. Power shortages in South Africa forced Anglo American to close mines last month. In Australia, the world's biggest coal exporter, BHP Billiton Mitsubishi Alliance, is among four miners that say they may miss deliveries after rain flooded pits. The rising prices helped drive up coal producers' shares. Centennial Coal, Australia's second-largest coal company by sales, gained 2.7%, while Sydney's Gloucester Coal rose 2.5%. Straits Asia Resources, a coal producer in Indonesia, rose up to 16% in Singapore trading. China Shenhua Energy Company, the world's second-largest coal company, climbed as much as 5.5% in Hong Kong. In China, more than three weeks of snow in the centre and south of the country have brought transport networks to a standstill and caused economic losses of at least 53.8 billion yuan ($A8.2 billion). China, reliant on coal for 78% of its power, is restricting exports to boost domestic supplies. GlobalCOAL's monthly index for Newcastle thermal coal prices rose $US1.71, or 1.9%, to $US90.87 a tonne in January, the fourth successive monthly record. Newcastle is the world's biggest coal-export harbour. JPMorgan has raised its estimate for 2008 contract prices for power-station coal to $US90 a tonne, from $US70. In addition to BHP Billiton Mitsubishi Alliance, Ensham Resources, Wesfarmers and Macarthur Coal have warned customers they may miss contracted deliveries after rains disrupted production in central Queensland. BHP Billiton said operations at its alliance with Mitsubishi might be affected for as long as six months. The Queensland disruptions are mostly affecting the metallurgical coal market, pushing spot prices up as high as $US210 a tonne. |
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COAL prices jumped 25% to a record at Australia's Newcastle port, a benchmark for Asia, as snowstorms in China, power cuts in South Africa and floods in Queensland reduced output.