Coal price soars to six-year high
COAL prices are soaring again, with thermal prices at six-year highs and coking coal looking to push through the $US200 ($A262) a tonne barrier.
Spot prices for thermal coal cargoes for export from the Newcastle terminal have reached $US115.25 a tonne - the highest level since February 2012.
The price of Australian coal used for electricity generation has risen to its highest level since 2012 as hot weather across north Asia spurs demand ahead of the peak season.
"Supply is tight out of Australia. What has also happened is exports out of South Africa are down," said Shane Stephan, managing director at New Hope, Australia's third-biggest independent coal producer.
"That opens up the market for more Australian coal into Asia."
The increased demand has led to a traffic-jam of dozens of ships waiting at Newcastle to load coal.
"You are seeing some real competition for access to thermal coal during this restocking phase in Asia," Mr Stephan said.
"I suspect that pricing could go a little higher yet."
Queensland operator TerraCom looks likely to generate sales of at least $48 million for the September quarter with its $1 Blair Athol coal mine, in the Bowen Basin, meeting demand in the Asian markets.
TerraCom said it had locked in sales of 520,000 tonnes of coal for the quarter at a forecast average price of $US92 ($A121) a tonne while Newcastle prices are about $US112.
TerraCom expects to lock in another 130,000 tonnes in coming weeks to meet its September forecasts.
Its margin is $54 a tonne, which would generate cash of about $28 million on the sales locked in so far.
The company took control of Blair Athol in May last year. It also has coal interests in Mongolia.
"The market for Australian thermal coal has shown considerable strength over the last two months with a strong focus from buyers on low total sulphur bituminous coal such as the product from Blair Athol,'' the company said.
"The sales portfolio continues to expand as old customers return looking for secure volume and new customers trial the product.
"The Blair Athol brand is strong among Japanese and Korean buyers.''
There is strong thermal coal demand from China, Japan, India and South Korea, and that has pushed thermal coal to the best price in about two years.
The news comes as a severe threat to Queensland coal exports remains, with rail freight company Aurizon refusing to yield to industry demands to scrap its maintenance changes on central Queensland rail network which are expected to cost exporters up to $4 billion.