coking coal to hit $500.00 a ton

Hi Guys

Have read several articles detailing coking coal prices could hit $500! a ton. Also several articles have stated it could take as long as april-june to get all mines back into full production. This is as long as no more rain hits that region.

LONDON Jan 17 (Reuters) - Coking coal prices currently trading at over $300 a tonne may reach $500 due to the intensification of rain in Australia, which provides nearly half the world's coal for steel-making, analysts Wood Mackenzie said on Monday.
Disastrous floods which began three weeks ago halted thermal and coking coal exports from Queensland state ports and Brisbane and are now spreading to Victoria. [ID:nL3E7CH01F] [ID:nL3E7CA0RK]

"Over half of Australian exports are likely to be affected and the impact of the decrease in exports will be felt strongly in the global coal market," WoodMac said in a research note."As the rainfalls have intensified on January 11, it is reasonable to assume that hard coking coal prices could reach between US$400 and US$500 per tonne.

"However, because the situation is still ongoing with more rain possible, the magnitude of the full supply impact is uncertain."Coking coal is more vulnerable to supply disruptions than thermal coal because supply has been extremely tight throughout 2010. Most exporters were already producing at capacity before the Australian floods. (Reporting by Jackie Cowhig; editing by James Jukwey)

http://af.reuters.com/article/southAfricaNews/idAFLDE70G0S620110117



Also another intresting article stating that only around 15% of coal mines are fully working.

Jan 18 (Reuters) - Only 15 percent of the 57 coal mines in Australia's Queensland state are in full operation after devastating floods, while 60 percent are operating under restrictions and 25 percent are yet to resume operations, the Queensland Resources Council said. The damage to the state's mining industry, which supplies around 90 percent of Australia's coking coal output, is estimated at around A$2.3 billion, after waters flooded pits, damaged rail lines and closed ports over the past few months, the Council said in a statement.

Australia accounts for about two-thirds of global coking coal trade and the Queensland disruptions have pushed global coal prices sharply higher, sending buyers scrambling for supplies as mines declared force majeure.
Floods devastated huge areas of Australia's eastern seaboard, including Brisbane, the nation's third-largest city, and some estimates put the cost of rebuilding in Queensland at A$10 billion.

Rio Tinto , BHP Billiton and Xstrata are among the companies involved in coal mining in Queensland.

Rail firm QR National , the biggest coal freight firm in the state, has been working around the clock to reopen rail lines and said some key lines would be back in service this week. "However, it is also clear that the restoration of rail services to mines west of Brisbane and in the Surat Basin are going to take much longer," Queensland Resources Council Chief Executive Michael Roche said.

Roche also said that environmental regulations, which require mines to treat water removed from mines, were also hampering efforts to return to normal operation and the Council has requested an exemption, seeking permission to dump water pumped from mines into creeks. Mining services experts have said it could take up to six months before all mines are back to full operation as the lack of available pumping capacity and environmental regulations slow efforts. (Reporting by Balazs Koranyi; Editing by Ed Davies)

http://www.reuters.com/article/idUSL3E7CH13Q20110117

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