Commodities/Coal: Australia’s Queensland state, recovering from its worst flooding, is facing 2 cyclones that may hit landfall this week. Flooding in Australia’s northeastern state since Nov has shut down coal mines, cut rail links & damaged crops. Queensland is the world’s biggest exporter of coking coal. The 2 weather systems is likely to bring very heavy rainfall, which depending on where it falls could cause further flooding.
Both Hay Point port, the world’s largest export harbor for steelmaking coal, as well Mackay port have been closed in anticipation of the storm. The earlier flooding caused mining companies including BHP Billiton & Rio Tinto to declare force majeure on their contract deliveries. The weather events will offer little respite to the supply disruptions & drive coal prices higher, further depress bulk freight rates, now at a 2-yr low.
Noble’s coal mines are mainly located much further south in NSW & hopefully may be spared. Stock is trading just above 50-day MA support at $2.17.
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