Flooding in central Queensland in January, continuing heavy rain in the region and a monsoonal deluge in Mackay over the weekend of February 16 and 17 are just some of the factors sending spot coal prices skyward.

With six major coal suppliers having declared force majeure and a halt on exports from China, Asian buyers are looking to other sources and are paying big premiums in an increasingly tight market.

The supply woes to beset Australian miners began for some with wet weather in December 2007, followed by extensive flooding in January.

Continuing rain has resulted in the affected miners’ reluctance to make estimates on how long force majeure conditions will remain in place.

On-going supply problems, coupled with shortages in China, South Africa and Indonesia, and Vietnam’s decision to cut exports to China by 22 million tonnes, have seen coal prices skyrocketing.

According to electronic trading platform globalCOAL’s weekly index, the spot price for thermal coal at the Port of Newcastle was $139.16 a tonne on February 15.
This represents a 49 per cent price hike since January 25.

Massive disruptions in the supply of coking coal in wake of the Bowen Basin floods have resulted in spot coking coal prices up to $270 a tonne, and speculation that $300 a tonne is a real possibility.