Coal Jumps to Record as Output Cut in China, Africa, Australia...

Coal Jumps to Record as Output Cut in China, Africa, Australia

By Angela Macdonald-Smith

Feb. 4 (Bloomberg) -- Coal prices jumped to a record at Australia's Newcastle port, a benchmark for Asia, surging past $100 a metric ton for the first time as snowstorms in China, power cuts in South Africa and floods in Queensland cut output.

Power-station coal prices at the New South Wales port soared $23.09, or 25 percent, to $116.44 a metric ton in the week ended Feb. 1, according to the globalCOAL NEWC Index. The price rose 73 percent in 2007. It was the second straight week of record prices. European prices rose to a record Feb. 1, according to ICAP Plc prices.

China, with coal deliveries disrupted by snowstorms, will halt exports this month and in March, while Anglo American Plc closed mines last month on power shortages. In Australia, the world's biggest coal exporter, BHP Billiton Mitsubishi Alliance is among four miners that declared force majeure on deliveries after heavier-than-usual rain flooded mines and roads.

``Spot prices over the coming months will continue to rise, notwithstanding the direction of oil prices,'' Australia & New Zealand Banking Group Ltd. said in a Jan. 31 report.

UBS AG, Europe's biggest bank by assets, on Feb. 1 raised its forecasts for thermal coal contract prices for 2008 and 2009, citing the coal ``crisis'' in China and supply disruptions in Australia. Contract prices may rise to $100 a ton this year and to $125 in 2009, up from previous estimates of $90 and $110, the bank said.

GlobalCOAL's monthly index for Newcastle coal prices rose $1.71, or 1.9 percent, to $90.87 a ton in January.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: February 3, 2008 14:12 EST