Australian coal exporters BHP Billiton and Rio Tinto have declared force majeure following severe flooding which halted ship loadings at Newcastle port and rail transport of coal, utility/traders and traders said on Monday.

Newcastle, Australia’s largest coal export facility, can handle 91 million tonnes a year.

Other coal exporters using Newcastle port, including Xstrata , are expected to declare force majeure imminently if they have not already done so, market sources said.

The operator of Newcastle port told Reuters earlier on Monday that around 2 million tonnes of coal exports would be lost.

Exports from Newcastle have been plagued by severe delays for many months. Congestion at the port has left vessels queueing for up to five weeks at a time. This has resulted in vast demurrage costs and exacerbated the already tight supply situation in Asia.

Prices for prompt Australian coal cargoes rose to $60.00 a tonne FOB Newcastle late last week.

Three fixed price trades on electronic trading platform globalCOAL on Monday saw spot prices rise to $61.50 a tonne FOB.

Suppliers and end-users said they are scrambling to buy prompt Australian cargoes because of the latest Newcastle export problems.

The tightness of Australian supply and strength of demand in Asia is encouraging market players to buy South African cargoes on the assumption that these can be sold into the Asian market.

South African prompt prices have also risen to more than $57.00 FOB Richards Bay from $55.00 a week ago because of the disruption to Newcastle exports and are expected to rise above $60.00 within the next several days, market sources said.

The scramble for prompt cargoes was a major factor behind the record number of 16 trades on globalCOAL on Monday, they said.

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