Australian Coal Shipments Disrupted; Rio Divests Stake in Alcan Engineering

Chandrasekhar Atreya
05 Jan, 2011
New York City

Sydney benchmark stock index fell further on the second day after overnight drop in commodity prices. Macarthur Coal lowered its first half profit guidance. Number of new homes sold in November drops. Rio Tinto divests its stake in Alcan Engineering Products.

[R]6:00 PM Sydney, Australia – Sydney benchmark stock index fell further on the second day after overnight drop in commodity prices. Macarthur Coal lowered its first half profit guidance. Number of new homes sold in November drops. Rio Tinto divests its stake in Alcan Engineering Products.[/R]

Stocks in Sydney fell on overnight drop in commodity prices which also sent the Australian dollar lower today. The drop was led by mining and energy stocks in thin volume directionless trading.

The ASX 200 Index dropped 0.58% or 27.60 to 4,714.90.

Overnight fall in commodity prices sent the Australian dollar lower in the morning trade in Sydney. Prices of copper also fell from a record high on Tuesday.

Australian dollar closed at $1.0002 in Sydney today.

Floods across central Queensland cost the state’s coal industry an estimated A$1 billion in production, a mining industry association said on Tuesday.

Queensland Resources Council CEO Michael Roche told reporters in Brisbane that disruptions could continue for months. He also said that many mines are flooded and are seeking Queensland government help to remove excess water.

The rains in Queensland and the flooding have forced Macarthur Coal to revise its earnings guidance for the second time in three weeks. The firm lowered its guidance range to the lower end of A$97 million to A$102 million.

The Baltic Exchange’s main sea freight index, which tracks dry commodities shipping rates, fell to its lowest level in 20 months on Tuesday after coal shipments from Australia got hit by floods in Queensland.

The number of new homes sold in Australia dropped 0.2% in November, after interest rate inched higher, a survey showed.

The latest Home Sales Report by HIA-JELD-WEN shows that detached house sales fell 1.1% while sales of multi-unit housing increased by 8.1% in November. During the period September to November, new home sales dropped 11% when compared to the year ago period.

Rio Tinto confirmed today that it has completed the sale of 61% stake in Alcan Engineering Products to several investment funds.

“The closing of our majority divestment in AEP marks Rio Tinto’s exit of substantially all downstream businesses and since 2008 we have completed divestments in excess of $11 billion,” CFO of the company Guy Elliot said in a statement today.

Chevron confirmed that its $43 billion Gorgon liquefied natural gas project in Western Australia is still on schedule despite some delays dogging the venture.

The number of job vacancies advertised rose last year, according to a survey.

Job agency IPA Recruitment said in its report that job vacancies advertised rose 3.2% in 2010 when compared to 2009, with sectors food, transport and logistics experiencing enhanced demand for new recruits.

Stock Movers

BHP Billiton fell 44 cents to A$45.01 while rival Rio Tinto was down 73 cents to A$85.07. Rio shares dropped even after announcing sale of 61% interest in Alcan Engineering Products to a number of investment funds.

Energy stocks fell after oil prices dropped from a 26-month high yesterday.

Woodside Petroleum dropped 1.05% to A$42.38 and Santos dipped 13 cents to A$13.06.

Macarthur Coal shares were down 22 cents to A$12.65 after the company brought down its first half profit guidance due to floods in Queensland.

Insurance companies pared some of the losses made yesterday with Suncorp Group gaining 1.8% to A$8.50 and QBE Insurance Group adding 8 cents to A$17.85.

Commonwealth Bank lost 58 cents to A$49.89 and National Australia Bank lost 17 cents to A$23.67. Westpac Corp lost 4 cents to A$22.08 while ANZ dropped 8 cents to A$23.18.