Friday, January 06,
Asian steel makers may have to face their worst fear after a top miner said it could take weeks to restore flood-hit coal mines in Australia: the possibility of an extended period of high costs and raw material shortages.
London-listed Anglo American , one of Australia’s top three miners of steel-making coal, said it saw weeks of work to pump water out of mines after more than two months of torrential rains in Queensland state, the world’s largest exporter of coal for steel-making.
Steel producers say they have enough coal supplies for now, and some have been raising product prices to meet a projected rise in coal prices to some $300 a tonne, 20 percent above current prices and the highest in two years.
“If the flood continues a couple of more months, it would cause big trouble,” said Choi Doo-jin, spokesman for South Korea’s POSCO , the world’s No.3 steelmaker.
“We don’t have trouble now although we see some shipments being delayed,” he said, adding that the company has about one month of coal inventory.
He declined to say how much of its total imports of coking coal come from Australia. Spot prices for coking coal are at around $250 a tonne, according to coal analysts and traders, more than 10 percent over the industry benchmark $225 a tonne free on board Australian ports negotiated between BHP Billiton and Japanese steelmakers for the first quarter of 2011. For more stories on Australian weather .
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