SINGAPORE: Australian coal cargo prices soared 10 percent this week after a huge storm hit the country’s east coast, forcing the Newcastle export terminal to stop all ship movements, while meteorologists have warned that another storm was gathering off the coast.
The cyclonic storm, which is lashing Australia’s east coast for a third day and has been declared a catastrophe, has destroyed houses, cut power to more than 200,000 homes and caused millions of dollars of damage in Sydney and other cities.
The Bureau of Meteorology warned that a second storm cell was gathering off the coast north of Sydney, packing gale force winds of up to 100 km per hour (62 miles per hour) and heavy winds hitting the coast.
Australia’s Newcastle coal terminal, the world’s biggest, is on Australia’s east coast, around 100 km north of Sydney, and the port authority said that it had stopped all ship movements due to the storm.
Prices for coal cargoes delivered next month from Newcastle soared 10 percent since the beginning of the week to $68 a tonne as traders expected export delays.
Newcastle coal prices are now at a premium of $8.20 a tonne to European coal (ARA), up from parity at the middle of April.Beyond the storm in Australia, however, analysts said that market fundamentals in coal remained weak.
“The market is yet again facing the situation of weakening demand in both the Atlantic and the Pacific and stubbornly high supply,” commodity brokerage Marex Spectron said.”The supply of Russian coal has depressed the ARA prices for months,” it added. European API2 2016 coal futures were last settled at $56.90 a tonne, near 10-year lows.
