Coal prices leap 25%, reaching record level

Coal prices jumped 25% to a record at Australia’s Newcastle port, a benchmark for Asia, as snowstorms in China, power cuts in South Africa and floods in Queensland reduced output.

Power-station coal prices at the NSW port climbed $US23.09 ($A25.46) to $US116.44 a tonne last week, the second straight week of record prices, according to the globalCOAL NEWC Index. Coal rose 73% in 2007.
China, the world’s largest producer and consumer of coal, will halt exports until April after the worst snowstorms in 50 years disrupted output. Power shortages in South Africa forced Anglo American to close mines last month. In Australia, the world’s biggest coal exporter, BHP Billiton Mitsubishi Alliance, is among four miners that say they may miss deliveries after rain flooded pits.

The rising prices helped drive up coal producers’ shares. Centennial Coal, Australia’s second-largest coal company by sales, gained 2.7%, while Sydney’s Gloucester Coal rose 2.5%. Straits Asia Resources, a coal producer in Indonesia, rose up to 16% in Singapore trading.

China Shenhua Energy Company, the world’s second-largest coal company, climbed as much as 5.5% in Hong Kong.

The Age