Australia Lowers Economic Outlook; Coal Drops

123jump.com Staff
20 Mar, 2009
New York City

Australia revised its jobless rate higher and economic growth rate lower. Jobless rate is expected to rise to 7% and economic growth is expected to drop to 0.75% in the current fiscal year. Separately, BHP slashes prices of coal for Japanese customers and other miners lower coal prices as well.

[R]3:00AM New York, 7:00PM Sydney- Australia jobless rate to rise above 7% in 2009. BHP to slash coking coal prices by 60%.[/R]

Australian market averages declined fractionally after Treasury Secretary Wayne Swan forecasted that the country’s jobless rate will rise more than initially forecasted.

Market losses were however trimmed after commodity and metal prices rallied.

In Sydney trading ASX 200 index fell 0.4% or 14.4 to 3,465.80.

Of the ASX 200 index stocks, 65 gained, 125 declined, and 10 were unchanged. FKP Property led gainers in the index shares with a rise of 41.9% followed by Babcock & Brown advancing 28.2%.

Australia’s Jobless Rate to Rise 7%

Associated Press reported today that Australia Treasury Secretary Wayne Swan said the country’s jobless rate is likely to soar above 7% on a deepening global recession.

The jobless rate forecast was revised after the International Monetary Fund forecasted global economic growth to ease between 0.5% and 1% in 2009.

Advanced economies are also forecast to shrink between 3% and 3.5% on average.

Australia’s February economic and fiscal outlook noted economic growth will ease to 0.75% for the fiscal 2009 ending in March 2010, while the unemployment rate was estimated at 7% next year.

BHP to Cut Coking Coal Prices by 60%

Dow Jones Newswires reported that Citigroup said today BHP Billiton has agreed to slash the coking coal prices for the 2009 to 2010 contract year by 60% to $115-$125 a ton to Japan’s Nippon Steel Corp.

The report notes that Merrill Lynch said BHP is close to settling coking coal prices at $129 ton for its premium Peak Downs brand.

Last year, contract prices ended the year at $300 per ton after floods in Australia’s Bowen basin shut down many mines.

South Korean steelmaker Posco confirmed it has settled pulverized coal injection prices down 63% from last year at $90 a ton with Australian suppliers.

“Prices are above market expectations, even for metallurgical coal bulls. A good outcome for producers in a clearly bear steel market,” said Merrill Lynch.

Aussie Rises

The Australian dollar increased 0.9% to 69.13 cents against the dollar.

Gainers & Losers

FKP Property led gainers in the ASX 200 index shares with a rise of 41.9% followed by increases in Babcock & Brown of 28.2%, in Macquarie Communications of 23.7%, in Connecteast Group of 16.7%, and Macquarie Media of 16.4%.

Commodity stocks rallied as gold prices jumped 7.8% to $958.80 per ounce and oil prices increased 7.2% to $51.6 per barrel. Minara Resources edged up 13.5%, Oz Minerals climbed 12.2%, and Felix Resources increased 5.9%.

Centro Retail Group led decliners in the ASX 200 index shares with a decline of 42.9% followed by losses in GPT Group of 32.6%, in Macquarie DDR TR of 31.4%, in Challenger Financial 22.9%, and Tishman Speyer of 22.1%.