Aurizon braces for impact of Cyclone Iris

Australian rail operator Aurizon has halted coal transportation on its rail networks in preparation for Cyclone Iris.

Forecasts indicate the tropical cyclone system is likely to remain off the east coast of Australia, but the storm has strengthened from a category 1 cyclone yesterday to category 2 today. It is expected to bring strong winds and heavy rainfall to Queensland towns such as Townsville and Mackay.

The approach of the cyclone prompted Aurizon to stop loading coal onto its trains today and begin stowing them.

The Queensland coal ports of Abbot Point, Hay Point and the Dalrymple Bay Coal Terminal (DBCT) all closed today as the storm approached. No trains have been allowed to unload at these ports since earlier today.

Aurizon said maintenance work on its networks will proceed as weather permits. But the company warned its customers that planned activities will be disrupted or cancelled if the weather worsens.

Coal market participants are alert to the threat of bad weather after Cyclone Debbi caused major disruption at this time last year. Production at Queensland coal mines was not heavily affected by Cyclone Debbie, but flooding of the rail network halted coal deliveries and forced some northeast Asian steelmakers to buy alternative cargoes from other coal-producing regions such as the US, Canada and even China. Prices for premium hard low-volatile coking coal surged as high as $304.35/t fob Australia as a result.