China, the world’s biggest coking coal importer, is scrambling to cover Australian supply disruptions after Cyclone Debbie knocked out mines and rails by turning to an unusual source: the United States.
Debbie, which hit Australia’s Queensland state last week, caused the evacuation of several mines and damaged coal trains supplying export terminals, triggering two miners – Yancoal Australia and QCoal – to declare force majeure on its deliveries. With other miners like BHP Billiton and Glencore also affected by the storm’s fallout, more disruptions may follow.
Force majeure is a commercial term that means a buyer or seller cannot fulfill their obligations because of outside forces. It is typically invoked after natural disasters or accidents. The outages caused Australian coking coal futures on the Singapore Exchange on Monday to spike by over 43 percent to a last settlement of $225 per tonne, the highest since the beginning of the year.
Australia is the world’s biggest coking coal exporter and is China’s largest supplier, leaving steel makers scrambling to find alternative supplies.
Spot coking coal prices on the Dalian Commodity Exchange, closed on Monday and Tuesday for a public holiday, jumped over 7 percent early on Wednesday to $197.8 per tonne, their highest level since December 2016.
For the rest of this article, click here: http://www.reuters.com/article/us-australia-cyclone-coal-china-idUSKBN1760DM