Sydney Stocks Rebound, Coal Surges 5%; Victoria Evacuations

Chandrasekhar Atreya
18 Jan, 2011
New York City

Stocks in Sydney rebounded with a rise in financials, material and energy stocks. Australia appoints a business task force to help Queensland recover from flood ravages. Brisbane returns to normal slowly, Victoria starts evacuations. Prices of thermal coal rises 5% as mines struggle to restart.

[R]6:00 PM Sydney, Australia – Stocks in Sydney rebounded with a rise in financials, material and energy stocks. Australia appoints a business task force to help Queensland recover from flood ravages. While Brisbane returns to normal slowly, Victoria starts evacuations. Prices of thermal coal rises 5% as mines struggle to restart.[/R]

The Australian benchmark index rebounded with a rise in financials, materials and energy stocks.

The ASX 200 Index gained 0.81% or 38.70 to close above 4,800 at 4,801.80 and the Australian dollar closed the day at 99.32 U.S cents in Sydney.

Australia has appointed a business taskforce to help Queensland recover from the devastating flood and its aftermath. Premier Julia Gillard said today a team of ten leading businessmen to assist with corporate support as Queensland recovers and starts its rebuilding efforts.

The group will be chaired by Treasurer Wayne Swan and meet the prime minister next week.

Meanwhile Premier Anna Bligh has bowed to pressure and convened an inquiry with the powers of a royal commission to look into claims that 80% of the floods in Brisbane resulted from release of a huge volume of water from the city’s main dam.

Residents of Victoria State have started evacuating their homes as flood waters rose to record levels, while Queensland capital Brisbane slowly limped back to work.

Power station coal prices rose to more than a two-year high and steelmaking coal gained as much as 5.7% following disruption in output.

The price of thermal coal from Newcastle in New South Wales jumped 5.1% to $138.50 a ton in the week ended January 14, the highest since September 2008, according to data provided by U.K.-based IHS McCloskey.

While ports have no capacity constraints for exports it is the ability of the mines to supplement the stockpiles that is creating the problem. BHP Billiton and Xstrata Plc and others have missed the coal shipments.

Oil prices declined after the operators of a pipeline from Alaska restored flows to the United States.

Alyeska restarted the Trans Alaska pipeline expecting throughput to increase to 500,000 barrels a day within 24 hours, according to a spokeswoman of the company.

Sydney-based Eastern Star Gas Ltd said it is talking to several Asian companies to sell a stake in a proposed liquefied natural gas project in New South Wales.

The company aims to export 1 million tons of LNG by early 2015, after earlier saying that it may its start first shipments in 2014, according to Managing Director David Casey.

Wool may be in short supply as production in Australia dropped amid improved demand from Europe, according to a South African industry group.

“There is a significant worry developing among users of wool that there will be a shortage of supply,” Andre Strydom, General Manager at Cape Wools SA in Port Elizabeth said on January 12, 2011. He also said that a worldwide shortage of cotton is also stoking the demand for wool.

Stock Movers

Fortescue Metals was the best performer among the stocks in the benchmark index with a rise of 8.02% at A$7.27 after estimating 30% increase in production.

BHP Billiton closed up 32 cents at A$45.62 while rival Rio Tinto climbed 92 cents to A$86.80, after announcing it set new quarterly and yearly iron ore production records after running operations to full capacity in 2010.

Moly Mines closed down 27.71% to A$1.10 after reports suggested its molybdenum project in Western Australia is in doubt.

ANZ gained 1.23% to A$22.99 and Westpac added 20 cents to A$22.40. Commonwealth Bank gained 44 cents to A$51.44 and NAB edged up 11 cents to A$24.27.

The energy sector traded higher with Oil Search gaining 10 cents to A$7.01 while Santos was up 6 cents at A$13.91.