The price of coking coal gapped higher again on April 13 with the industry benchmark price surging 4.6% to $314/t due to continued supply outages following tropical storms in Australia, according to Steel Index tracking data.
It's the highest price for Australia FOB premium hard coking coal since the second quarter of 2011. That price spike was also the result of flooding in Queensland that saw quarterly contract prices negotiated at an all time high of $330.
Coking coal has more than doubled in two weeks on the back of disruption to Australia's coal exports associated with Cyclone Debbie which caused serious damage to key rail lines serving mines in the state of Queensland.
Three lines are set to reopen by the end of this week according to operator Aurizon but large sections of the Goonyella railroad in the centre of the network could be still closed until May.
Roughly 12–13 million tonnes of Australian met coal cargoes destined for China, India and Japan could be delayed.
Customs data released on April 12 show Chinese imports of coal (both thermal and metallurgical coal) in March rose 12.2% from year on year and 25% from February to 22.1 million tonnes.
The global met coal market is around 300 million tonnes per year with premium hard coking coal or PHCC constituting more than a third of the total market. More than half of PHCC seaborne coal come from Australian producers, according to TSI data.
A reduction in allowable work days at China's coal mines last year sparked a massive rally in coal prices, lifting met coal prices to multi-year high of $308.80 per tonne by November from $75 a tonne earlier in 2016. But the speculative rally fizzled soon fizzled out with the commodity hitting a 2017 low of $150.10 a tonne last month.
(Writing by Becky Du Editing by Harry Huo)
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