The recent floods in Australia will affect the global energy market as Queensland’s coal exports are severely reduced. This is likely to lead to much higher global prices in 2011, according to the PA Consulting Group.
Australia is the world’s largest exporter of thermal and coking coal, which means the global market will suffer as the reduced supply will increase coal prices. Since the floods, thermal coal has risen from $90 a tonne in October to $130. Analysts predict it to rise beyond $150 a tonne.
Coking Coal has risen 12 per cent to $230 a tonne with forecast of it exceeding $300 a tonne.
The floods have left Australia with damaged infrastructure meaning the the impact will most likely be felt in the long term.The floods are estimated to have created billions in damage to road, rail and ports, all essential for the export of coal.