It is shaping up as a decent day for Australian producers of coking coal as the price of the commodity continues to climb in the wake of supply outages.
The price of coking coal has been on the ascent after Cyclone Debbie hit the north-east coast of Queensland, an area that produces about half of the world’s supply of the steel-making ingredient. Analysts have forecast a rise in prices as the shutting down of – or damage to – mines and infrastructure, such as railways.
Hard coking coal almost doubled last week to $283.10 a metric tonne, according to the Steel Index, which is the highest price since December 9.
Shares in Whitehaven Coal were leading the charge, up 2.4 per cent, although it sells its coal on contract. South32, which was not affected by the cyclone, was up 2.2 per cent. The BHP Billiton spin-off sells its coal on the spot market, and should therefore benefit more from the rise in prices. The S&P/ASX 200 was 0.5 per cent higher.
BHP, which last week declared force majeure for all coal products from two of its massive joint venture projects. Shares were up 0.9 per cent this morning.
Early last week, analysts at UBS said it was possible the supply shortages could push the coal price about $100 higher from its then level of $155 a tonne.