Reuters Insider - Inside the News: Australian Floods Cause Coal Price Surge

CPI SA

13/06/2016 11:08

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Australia's devastating floods could remove 5     
                     percent or more of steelmaking coal from world    
                     markets. Analysts revise coking coal price        
                     forecasts higher.                                 
 
 
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Transcript (May be auto-generated)

                 Inside the News at midday in Hong Kong on Wednesday, January 12. Standby for a 
surge in commodity prices. Commonwealth Bank says Australia's floods could 
remove 5% or more steelmaking coal from world markets. And that is likely to 
drive up prices. Deutsche Bank has revised upwards its estimate of the cost of 
coking coal by as much as a quarter. And a Central Bank Board Member warns the 
damage could slash up to 1% off GDP growth. Prime Minister Julia Gillard pledged
federal aid to those affected. Queensland has already faced some dark days. And 
there are dark days still ahead. But Australia is standing with you, working 
with Queensland to help Queensland through this crisis. And we will be there 
shoulder-to-shoulder, not only for the days ahead, but for the many months of 
recovery and rebuilding to come. For more, we're joined by Mark Bendeich, 
Reuters Bureau Chief in Sydney. So Mark, the floods have put a break on 
Australia's coal sector. So what is the latest there? Well, the latest is that 
basically the picture doesn't seem to be improving and, if anything, it seems to
be getting a little worse. The Bowen Basin, which is the heart of the coking 
coal industry in Australia is actually emerging slowly from the flood waters 
that have since moved South. But the signs of progress of a precious few from 
the mining companies and the ports as well are either on restricted volumes or, 
in one case, it's actually closed. So right now, the picture doesn't seem to be 
brightening. Thanks for that, Mark. The flooding also putting the Aussie-Dollar 
under pressure, dropping towards the 0.9800 mark in the Asian session. IFR's 
Head of Asia FX, John Noonan, says the Aussie is no longer the commodity 
currency of choice for FX traders. The flood crisis in Queensland has led 
investors to sell out of the Australian Dollar and now they're moving into the 
Canadian Dollar as the commodity currency of choice. The Australian Dollar has 
now fallen 5% against the Canadian Dollar since the start of 2011. 

The Aussie-US fell to 0.9803 today to break below the 0.9811 support level which
is the 61.8% Fibonacci of the 0.9536-1.0257 move. And the next level of support 
isn't found until the 100-day moving average at 0.9745. Some analysts are 
looking for a move all the way through a full retracement of the December 1 low 
at 0.9536. Euro-Dollar ticking higher as traders take out stop loss orders above
$1.30. Sentiment remains weak ahead of debt sales by Portugal later today and by
Spain tomorrow. Bears looking at current levels as a good place to start fresh 
selling. 

China's rising CPI remains a major concern for markets. But Beijing has the 
ability to manage inflation expectations. That's the message from Vice Premier 
Li Keqiang who spoke at a China-Britain Business Council dinner in London 
overnight. Nymex Light Sweet Crude shooting up past $91-a-barrel as the shutdown
of two North Sea oil fields stoked supply concerns. The Trans-Alaskan pipeline 
remains shut, but officials there plan to temporarily restart the pipe to avoid 
freezing. We'll bring you more in food inflation later today in a special 
looking at global price increases with the Asian Development Bank, Rabobank, and
Control Risks right here on Insider at 0930 GMT. I'm Cathy Yang. This is 
Reuters