Australian Floods To Cause Long Term Effects On Global Steel Industry?

Posted in Industry News on 5th January 2011

William Rowland are a leading supplier of Stainless Steel.

Queensland, Australia is the main supplier of coal across the globe and many steel producing companies rely on its prompt delivery. But as rain has continued to fall over the last 3 months in the region, there have been significant delays to coal production as three quarters of the mines have had to close. The floods have impacted heavily on mines in the northern Bowen basin, and the closure of the main rail line to ports nearby to Mackay has added to the millions of dollars lost.

The Australian coal mining companies have implemented force majeure which frees them from any contractual delivery requirements due to natural disasters. Companies who have decided to take this action following the flooding include Rio Tinto and BHP Billiton.

Steel companies are turning to the USA and Canada for their metallurgical coking coal supplies to keep their businesses running. Not only are there fears of coal not reaching their destinations in time, but also of steel shortages and a high increase in price for steel. Steel analysts say it is too soon to say how big the impact will be on the economy, and that it all depends on how long the floods last and what the steelmakers current stockpiles of coal are. Australia's supply is crucial to its economy, but now other coal producing countries may now be benefiting from the floods.

The global spot price is currently $250 per tonne for coking coal which is 11% higher than the contract deal price of $225, and spot prices are expected to increase even further. A steel company in China, who usually get 80% of their coking coal from Australia, are now turning to the spot market for alternative supplies.

William Rowland Ltd are ferro alloys suppliers, high purity metals suppliers, metal powders suppliers, nickel powder suppliers, nickel alloy suppliers and tin suppliers. If you would like to find out how we can meet your requirements, please contact us using the Quick Enquiry Form on the right-hand side of this website.

Tags: Metal Powders News, Stainless Steel News