Via UBS:
Tropical Cyclone Debbie crossing Queensland coast TC Debbie (Typhoon/Hurricane for Asian/American readers) has crossed the Queensland coast around midday AEST. The cyclone was classified a Category 4, which carries very destructive winds with gusts up to 260km/hr at the eye. The Cyclone crossed the coast near Proserpine & currently forecast to head south west over the northern part of the Bowen Basin coal fields. It is forecast to decline into a rain depression within 24 hours bringing heavy rain to these areas.
What are the potential impacts for the Queensland Met Coal industry? Rainfall is the big factor when contemplating the risk for production from Queensland. The centre of the cyclone has temporarily closed the major ports of Abbot Point, Hay Point & Darlymple Bay which ship ~150Mtpa. Weather radar also seems to indicate the mines are likely to see high rainfall in the next 48 hours (see Figure 4). But rainfall over the wet-season has been a tad lower in the coal producing regions (50-200mm) than is normal to date (Figure 5-6). The impact of the cyclone on coal exports will depend on the damage in the short term to rail & port infrastructure (days/weeks). If there are to be medium term impacts (weeks/months) then these would come from rainfall filling coal pits. The 2011 rainfall event was from prolonged rainfall from 2016Q3 into Dec-10 & Jan-11, not due to any one cyclone. Coal producers are also likely in a better position to recover due to greater pumping capacity installed in 2011. So while it is at this stage too early to assess the impact, we wouldn’t think 2011 volume impacts will repeat.
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