Coal prices gain as floods in Australia curb supplies

The price for thermal coal at the port of Newcastle in New South Wales, the benchmark for Asia , jumped $6.70, or 5.1 percent, to $138.50 a metric ton in the week ended Jan. 14, the highest since September 2008, according to IHS McCloskey, a Petersfield, U.K.-based provider of coal data, Kazinform refers to Bloomberg.

The state's worst flooding in 50 years may have cost A$2.3 billion ($2.3 billion) in lost coal sales, Queensland Resources Council estimates with only 15 percent of the state's mines operating at full production. BHP Billiton Ltd . and Xstrata Plc are among producers who've said they may miss deliveries.

Australian hard prime coking coal sold for $280 a ton on average last week, up from $265 the week before, according to IHS McCloskey. That's the highest price for data going back to the week ended Nov. 5.

Global prices for coking coal used by steelmakers may reach between $400 and $500 a ton because of the floods, according to consultant Wood Mackenzie Ltd.

The deluge may cut output of the two coal varieties by about 15 million tons, according to estimates from National Australia Bank Ltd. Some mines may take as many as six weeks to resume production, the bank said.

Australia is the largest shipper of steelmaking coal and trails only Indonesia in exports of the commodity burnt by power stations. The country shipped 259 million tons of the two varieties in 2009, the World Coal Association website shows.

To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]

To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at [email protected]