Jump to content
House Price Crash Forum
Sign in to follow this  
newbonic

Australia Hit By 'biblical' Floods = Higher Leccy Prices In The Uk?

Recommended Posts

The BBC report says:

Australia's Queensland faces 'biblical' flood

A senior official has described the flooding in Queensland, Australia, as a disaster of "biblical proportions".

The crisis has been triggered by Australia's wettest spring on record. At least six river systems across Queensland have broken their banks.

State Treasurer Andrew Fraser said the economic impact would be severe, with huge costs compounded by lost income from mining, farming and tourism.

......

"Royalty forecasts are likely to be hit with freight lines cut and reports that many mines may not reach full production again for two to three months."

Queensland is the world's largest exporter of coal, so this may cause a spike in the cost of coal. And given that the UK generates about a third of its leccy from coal, and we only produce about 20m of the 60m tonnes that we consume, can we expect more upward pressure on energy prices?

Yes, probably.

Just thought I'd add to the New Years fuel angst :D.

PS: They also produce a lot of copper, silver, and other metals, so look for a price spike in them when trading opens on Monday/Tuesday.

Share this post


Link to post
Share on other sites

Bugger if only the UK had about 300 years worth of coal reserves and a mining industry.

Still importing the stuff is better than having miners and work for them. Globalisation it's cheaper to import...

This won't be the case forever. Once the easy (cheap) oil starts to deplete badly the jig will be up. This is yet another disaster TPTB are not preparing for.

Share this post


Link to post
Share on other sites

Bugger if only the UK had about 300 years worth of coal reserves and a mining industry.

Still importing the stuff is better than having miners and work for them. Globalisation it's cheaper to import...

After 250 years of intensive deep mining, we're pretty much mined out of easy to access and good quality coal. Although I did read that they were considering opening a coal mine next to the Port Talbot steelworks in S Wales for the type of coking coal that's used in steel production in their blast furnaces.

Meanwhile, the price of coal looks like heading one way only. This from the Telegraph:

"In the week to December 24 [2010], coal prices at the Richards Bay Coal Terminal in Queensland jumped 14pc to an average $128.10 per tonne, according to data from IHS McCloskey. This is the highest level since the week ended October 3, 2008.

Australia accounts for almost two-thirds of the global coking coal trade, which is a vital ingredient in steel-making. Demand in China and India remains strong and prices have risen sharply after the industry moved to a quarterly pricing system.

Steel prices are expected to continue to rise next year, even without Australian supply issues. The Steel Authority of India, which is the Asian nation's second-largest steel producer, agreed to pay 8pc more for imported coking coal in the first quarter of next year on Wednesday.

The Steel Authority will pay $225 per tonne to suppliers including BHP Billiton, a level that is 74pc higher than the price it paid during the year ended March 31. Broker UBS forecasts that prices will hit $250 a tonne in the second quarter of 2011."

Share this post


Link to post
Share on other sites

"In the week to December 24 [2010], coal prices at the Richards Bay Coal Terminal in Queensland jumped 14pc to an average $128.10 per tonne, according to data from IHS McCloskey. This is the highest level since the week ended October 3, 2008.

#

Richards Bay is in South Africa FFS! And the the Torygraph want us to pay for their grisly crap?

[/rant off]

Share this post


Link to post
Share on other sites

Today's story on the possible effects of the Queensland floods on steel and wheat etc., on the BBC website

http://www.bbc.co.uk/news/business-12110138

"The Queensland floods could have a "significant long-term effect" on the global steel industry, the premier of the Australian state has warned.

Anna Bligh's comments came as three quarters of the state's coal fields are unable to operate due to being flooded.

The situation in Queensland is being closely watched by the global steel industry, because it exports half the coking coal needed to make the metal.

However, steel analysts say it is too soon to be able to quantify the impact.

They say this is because it depends on how long the floods continue, and the size of the coking coal stockpiles the world's steelmakers currently have in place.

Ms Bligh told Australian broadcaster ABC: "We have three-quarters of all of our coal fields unable to operate and unable to supply markets."

Railway lines that transport the coal to ports for export have also been flooded.

Ms Bligh added that until the waters recede, "it's going to be hard to really fully assess the long-term economic and social impact".

"This is an event that will have a ripple effect across Queensland, Australia and some parts of the international region for many months to come," she said.

The price of Queensland coking coal has jumped to $253 per tonne from $225 in the past three weeks.

However, prices peaked at $305 during the last serious flooding in the state in 2008.

Meanwhile, the global spot - or trading - price of coking coal is now around $250 a tonne, 11% higher than the most recent long-term contract deal price of $225.

Analyst Grant Craighead of Stock Resource in Sydney, said he expected spot prices to increase further.

"The market was already tight, so there's only one way things can go," he said.

"The price will get squeezed upwards and producers will scramble for coking coal wherever they can."

Taiwan-based China Steel, which usually gets 80% of its coking coal from Australia, said it was now turning to the spot market for alternative supplies.

Wheat impactThe flooding in Queensland has also damaged wheat crops in the state, but Queensland only accounts for 5% of Australia's wheat exports.

However, as Australia is the world's fourth-largest wheat exporter, global prices of the grain have risen, also not helped by heavy rain in other Australian states affecting the quality of their crop.

On Tuesday, US high-protein wheat futures in Kansas City and Minneapolis hit two-year closing highs.

Analysts have also warned that the flooding in Queensland will put up the price of sugar cane, its other main crop, plus those of the state's fruit, vegetables and dairy products.

"It's very hard to be precise on this, but as a rough estimate the flood impact on production and demand could shave around 0.4% points off [Australian] GDP," said Helen Kevans, an economist at JP Morgan.

Share this post


Link to post
Share on other sites

It's looking bad for coal prices still (or good if you're a producer I suppose)....

From Maritime News:

"Prices for thermal coal, which is used for power generation, have risen sharply in the past month, making the commodity more attractive to investors than oil or natural gas, Barron’s said...."

From TIME today:

"

More than a week of pounding rains has left much of northeastern Australia under a sea of muddy water that is making its way through river systems toward the ocean.......

[/url]

The flooding was already having an impact on Queensland's economy, ruining crops and closing most mines. Floodwaters had made it impossible for 40 of the state's coal mines to operate, ministers said at an emergency Cabinet meeting in the Queensland capital Brisbane on Wednesday.

"It's going to take some months for some mines to be back to full operation," Resources Minister Stephen Robertson said. "We earn `round about AU$100 million ($100 million) a day exporting coal to the rest of the world and exports have been significantly restricted by the impact on infrastructure."

Read more: http://www.time.com/time/world/article/0,8599,2040799,00.html#ixzz1AANEeFaA

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.