Dust Control & Environment, Mining and Heavy Industries

Coal market spiked by Cyclone Debbie

Photo: Shutterstock

China is reportedly scrambling to make up coking coal supply after Cyclone Debbie knocked out several weeks’ supply from Australia.

Reuters reported this week that the United States was one country the Asian giant was looking to, to source coking coal as a result of the outages.

Several mines were evacuated due to the major weather event, and the rail network has been heavily impacted.

BHP Billiton on Tuesday said extreme rainfall had impacted power, logistics and services in the Bowen Basin, but said crews were returning to work at the mines this week.

But other miners weren’t so fortunate, with Yancoal Australia and QCoal both declaring force majeure on their deliveries, per Reuters.

With several mines still closed and the rail network out of action, some experts have indicated the cyclone may have resulted in around 17 million tonnes of coal sales lost.

The state government could lose around $200 million in revenue as a result.

The price of coking coal soared to US$175.70 on Tuesday morning, a three-month high.

Supplies from the United States will reportedly subsidise the lost coal in China.

“The Chinese are fixing cargoes from the United States in order to replace the shortfall from Australia,” one trader was quoted as saying.

“More will make its way from the US to China very soon.”

After a two-year stretch where no coking coal was traded between the US and China, 500,000 tonnes of US coal has already landed in China this financial year, according to Thomson Reuters Eikon data.

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to a friend