Australian floods raise Canadian coal shares
Share prices of Canada's biggest coal mining companies rose Tuesday amid concerns about how flooding in Australia will affect shipments of coal, wheat and sugar in the short term.
Teck Resources closed up 1.7 per cent, to $62.84 on the Toronto Stock Exchange. Western Coal was up 2.2 per cent, to $12.57, and Grand Cache Coal rose five per cent, to $10.99.
Wheat exporter Viterra also traded higher, up 2.3 per cent, to $9.49.
Flooding in Australia, over an area bigger than France and Germany combined, has slowed or halted rail and road shipments and closed mines.
The flooding has also shut down several coal mines in Queensland, which produces more than a third of the world's coking coal, used in steel making.
The disruptions come as the growth in demand in emerging economies such as China threatens to outpace global supply.
Cash prices for coking coal on international markets have risen 10 per cent in the last month.
Greg Barnes, an analyst with TD Newcrest, increased his price forecast for coking coal to $240 US a tonne from $220.
"We expect coking coal supply to remain tight for the next several years, in part due to infrastructure constraints in Australia," he said in a commentary.
Canada is the world's fourth-largest coal exporter, with $2 billion in shipments a year. It exports about 28 million tonnes annually to more than 20 countries.
March wheat fell two per cent to $7.8925 a bushel after rising as much as 3.9 per cent Monday, as concerns eased about wheat supplies, given that most of Australia's crop was harvested before the flooding hit.
Prices for raw sugar initially rose for a second day in New York on fears wet weather will affect not only shipments from Australia, the world's third-largest sugar exporter, but also production in India. By late afternoon, sugar was down 3.5 per cent to $31 per pound.
With files from The Associated Press