cey- good news for coal miners

Coal ship queues grow
February 10, 2004


Coal-loading and shipping delays are helping to boost freight rates and coal prices, with ships being held up in port amid surging Asian demand.

Ship queues outside Newcastle had more than doubled in the past year to an average of 41 in January, analysts said, while at Dalrymple Bay terminal in Queensland queues have gone from zero to as high as 15.

This is part of an international shortage of shipping, with the dry bulk freight rates on the Baltic Exchange up 550 per cent in the past 18 months.

Australia is the world's biggest coal exporter, shipping $12 billion worth of coal a year.

Freight rates for dry bulk cargoes such as coal and iron ore reached a record in January as Chinese imports boost demand for raw materials from miners such as BHP Billiton and Rio Tinto Group and port delays tie up ships.

Contract prices for hard coking coal should rise 22 per cent this year, while steaming coal prices may rise 42 per cent, UBS said.

The delays "have removed some shipping capacity from international shipping routes because, while the ships are queued up at the port waiting to load coal they're not being effective," said Greg Dean-Jones, principal coal analyst at AME Mineral Economics in Sydney.

"There is an indirect effect on prices because it is helping tighten the market."

Bloomberg