Coal prices up Down Under after storm shuts port
BHP Billiton declares force majeure
By Dave Hannon -- Purchasing, 6/14/2007 3:16:00 PM
A major storm in Australia late last week shut down the world’s biggest port for exports thermal coal shipments this week.
With the port of Newcastle shut down, Melbourne-based mining giant BHP Billiton was the first to declare force majeure on thermal coal shipments. Xstrata and Rio Tinto's Coal and Allied Industries unit also declared force majeure this week.
Bloomberg reports that the four-day storm, which left nine people dead, shut Newcastle Port, halted most coal trains from the Hunter Valley and drove a bulk carrier aground.
On Wednesday, the Hunter Valley Coal Chain Logistics Team, a cooperative that plans all coal exports from the Hunter Valley, said on its web site, “There are currently 67 vessels offshore at Newcastle including coal and non-coal vessels. Approximately 55 of these have returned to anchor off the cost. The queue is now expected to remain at more than 60 through to the end of June, falling to between 35 and 45 next month, the group said. The port's operator expected about 2 million tons of coal exports to have been lost from the disruption.
According to Reuters, benchmark Australian spot thermal coal prices hit $61 a tonne, the highest since a record above $63 in July 2004. Analysts at Australia & New Zealand Bank said prices for power-station coal in Australia may rise by as much as 8% to $66 a ton from $61, a three-year high, if deliveries fail to resume in the next two weeks, Andrew Harrington, a commodity analyst tells Bloomberg.
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