Ireland Flood Case Study
MARCH | 2011
Queensland floods - Impact on Global Commodity Markets
“Mining and agriculture - Queensland’s top export industries”
Queensland’s share
...of Australia’s economy
19%
Australia’s Outlook
GDP rise in 2010-11
...of global coking coal exports
56%
...of Australia’s fruit and vegetable production
28%
4.25%
1
Reconstruction cost
$19.7bn
Copyright © Beroe Inc, 2011. All Rights Reserved
Summary Australia is suffering from the severe economic impact of the worst floods in Queensland in almost 40 years. Its coal exports have been especially hit hard. Australia is the world’s largest coal exporter; it accounts for about 56% of global coal exports. Almost a third of the world’s coking coal comes from …show more content…
However, many shipments were lost 4 he floods are expected to propel coking coal prices T during the floods in December. Abbot Point, Dalrymple to an average of about USD 260 per metric ton in Bay, Hay Point, and RG Tanna are some of the major 2011, which is about 25% more than the expected export terminals that were affected. annual increase in coking coal prices. As a result, the cost of steel products, like HR and CR coils, is likely to increase. In addition, the hike in coking coal prices is expected to support the price hike of other raw materials used as substitutes for steel making, such as ferrous scrap and pig iron. 4 he supply shortage of coking coal in Q2 2011 is T likely to result in about a 8-10% rise in global coking coal prices compared to Q1 2011. This price rise is expected to be passed on to end users in time. 4 he prices of global HRC and CRC are expected to T increase by about 5-6% in Q2 2011, about 1-2% higher than the expected price of flat products for the quarter. 4 he flooding in Queensland has had an indirect impact T on the prices of iron ore, another major raw material used for steelmaking. The floods affected freight The BDI, which tracks the international shipping rates of charges. As a result, FOB based prices for iron ore are various dry bulk cargoes, dropped by 20 points to 1,064 gaining more importance. The impact of the floods on points on February 2, 2011. This decline was the first drop the supply of iron ore is projected to be low, as there by a large margin in the last two years. The Capsize Index, are few ores in the flood affected region. BACI, fell by 1.74%, indicating that there was a fall in the 4 he profitability of non-integrated steelmakers is T rate of capsizes, which are typically used for bulk iron ore likely to be affected in Q2 2011 due to the high cost and coking coal transportation. This decline was primarily of
Queensland floods - Impact on Global Commodity Markets
“Mining and agriculture - Queensland’s top export industries”
Queensland’s share
...of Australia’s economy
19%
Australia’s Outlook
GDP rise in 2010-11
...of global coking coal exports
56%
...of Australia’s fruit and vegetable production
28%
4.25%
1
Reconstruction cost
$19.7bn
Copyright © Beroe Inc, 2011. All Rights Reserved
Summary Australia is suffering from the severe economic impact of the worst floods in Queensland in almost 40 years. Its coal exports have been especially hit hard. Australia is the world’s largest coal exporter; it accounts for about 56% of global coal exports. Almost a third of the world’s coking coal comes from …show more content…
However, many shipments were lost 4 he floods are expected to propel coking coal prices T during the floods in December. Abbot Point, Dalrymple to an average of about USD 260 per metric ton in Bay, Hay Point, and RG Tanna are some of the major 2011, which is about 25% more than the expected export terminals that were affected. annual increase in coking coal prices. As a result, the cost of steel products, like HR and CR coils, is likely to increase. In addition, the hike in coking coal prices is expected to support the price hike of other raw materials used as substitutes for steel making, such as ferrous scrap and pig iron. 4 he supply shortage of coking coal in Q2 2011 is T likely to result in about a 8-10% rise in global coking coal prices compared to Q1 2011. This price rise is expected to be passed on to end users in time. 4 he prices of global HRC and CRC are expected to T increase by about 5-6% in Q2 2011, about 1-2% higher than the expected price of flat products for the quarter. 4 he flooding in Queensland has had an indirect impact T on the prices of iron ore, another major raw material used for steelmaking. The floods affected freight The BDI, which tracks the international shipping rates of charges. As a result, FOB based prices for iron ore are various dry bulk cargoes, dropped by 20 points to 1,064 gaining more importance. The impact of the floods on points on February 2, 2011. This decline was the first drop the supply of iron ore is projected to be low, as there by a large margin in the last two years. The Capsize Index, are few ores in the flood affected region. BACI, fell by 1.74%, indicating that there was a fall in the 4 he profitability of non-integrated steelmakers is T rate of capsizes, which are typically used for bulk iron ore likely to be affected in Q2 2011 due to the high cost and coking coal transportation. This decline was primarily of