Australia floods hit consumers, coal sector on mend

Coal export terminals showed signs of recovery on Wednesday as Australia began a clean-up process from massive flood damages that could take months and has undermined consumer confidence in the $1.3 trillion economy highly dependent on commodity exports.
Flooding blamed on rains triggered by a La Nina Pacific weather pattern has devastated huge areas of the eastern seaboard, killing 25 people and causing thousands to be evacuated, while destroying crops and crippling Australia's A$50 billion coal industry and causing coal price spikes.
Risks also remain for more wild weather. Australia's weather bureau issued weather warnings on Wednesday for areas of south-east and south central Queensland, including Gladstone, the location of one of the state's major coal export terminals. "Severe thunderstorms are likely to produce damaging winds, very heavy rainfall and flash flooding," the bureau said.
In a sign of some improvements, Queensland's coal mines are now operating at full permanent staffing levels, coal rail systems are back up and running and the state's two largest coal export terminals said shipments were set to increase as coal rail haulage lines and mines return to normal. "With the Moura rail line open and the Dawson, Callide and Boundary Hill mines railing coal, the port of Gladstone can now start ramping up export capacity," Gladstone Ports Corporation Chief Executive Leo Zussino said in a statement.
But there were signs that the coal industry will only make a slow comeback, with Gladstone Port, Queensland's second largest coal export port, saying it would take until the end of March for exports to return to normal. Australia's consumer sentiment has also taken a hit as wall-to-wall media coverage of the floods raised anxieties. Consumer sentiment fell 5.7 percent in January, the biggest fall in about six months, according to a Westpac-Melbourne Institute report.
"There is no doubt that the sharp slide in consumer sentiment is almost wholly due to the flood disaster across the nation," Savanth Sebastian, an economist at Commonwealth Securities in Sydney said in a note. Australia, the world's largest coal exporter, accounts for about two-thirds of global coking coal trade, with around 90 percent of that coming from Queensland state. Coking or metallurgical coal is used for steelmaking.
The Queensland Resources Council has estimated that only 15 percent of the 57 coal mines are fully operational, 60 percent are operating under restrictions and another 25 percent have yet to restart production. Damage to the industry is estimated at A$2.3 billion. Global miners Rio Tinto, BHP Billiton and Xstrata are among major companies involved in coal mining in Queensland. Australian coal-to-retail conglomerate Wesfarmers expects flooding in Queensland state to significantly reduce output at its Curragh coal mine, the firm said on Wednesday.