Monday, 17 Jan 2011
Bloomberg reported that several analysts’ sees floods in Australia disrupting coking coal supplies and boosting steel making costs.
RBS Equities analyst Mr Rahul Jain without giving estimates said that stoppages in coal shipments from Queensland State under force majeure clauses are likely to create a shortage in the April to June quarter, forcing steelmakers to lower production.
Mr Rakesh Arora an analyst at Macquarie Group Ltd in Mumbai said that steelmakers may also raise prices to cover cost increases.
Mr Giriraj Daga an analyst at Nirmal Bang Securities Ltd in Mumbai said that the worst floods in 50 years in Australia’s largest coal exporting region is creating a raw material shortage in India, where steel demand is forecast to grow 10% in the year to March 31. Profit margins at Indian steelmakers may shrink more than 10% next quarter because of an increase in fuel costs.
Mr Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd in Melbourne said that Queensland, which accounts for about 20% of Australia’s AUD 1.3 trillion economy is losing AUD 480 million a week in coal exports
According to Mr Petersfield Englandbased researcher IHS McCloskey, Australian coking coal rose to USD 265 a tonne on average last week from USD 248.
Sourced from Bloomberg
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