Daniel Brebner, an analyst with Deutsche Bank AG in London, comments on the impact of rain and flooding in Australia that have forced mines to close. Floods in the state of Queensland have covered an area the size of France and Germany.
Coking coal and iron ore are used to make steel. Thermal coal, a source of power generation, can sometimes be sold to steelmakers if it’s of sufficient quality. China made 44 percent of the world’s steel in November, according to the World Steel Association. Brebner commented in a report today. “Both coking coal and thermal coal are impacted, however coking coal may be more critical as Australia is the key global seaborne supplier. It is possible that, with constraints also for high-rank thermal, steel producers in China and elsewhere might have to lower steel production as a consequence, thereby putting pressure on iron-ore pricing.”