More cyclone Debbie fallout today, via UBS
Met coal prices to lift as TC Debbie’s damage drives ~15Mt out of the trade
Queensland’s dominant coal rail operator Aurizon updated the market with estimated recovery time for the four main export coal rail corridors. The damage to rail networks is worse than we had expected. Our initial view that the biggest risk to coal supply would come from mine pit inundation rather than infrastructure damage appears incorrect. Aurizon projects rail corridor outages at 1-5 weeks. We estimate ~15Mt total, or ~5%, of seaborne met coal supply might be lost from coal markets. Tighter met coal markets will undoubtedly drive seaborne pricing higher.
