Bush fires force Aurizon to shut Blackwater line

Raging bush fires in central Queensland after a prolonged dry spell has prompted Queensland rail operator Aurizon to shut the Blackwater railway line until further notice.

"Aurizon Network has advised operators in the Blackwater system to commence stowing trains as precaution, given the extreme fire conditions in the region. This process will take several hours and will result in the closure of the system until further notice," an Aurizon spokesman said after consulting with the Queensland Fire and Emergency Services.

The Blackwater line serves mainly semi-sort, semi-hard and second-tier coking coal producers exporting out of the port of Gladstone, including the Curragh coking coal mine owned by US firm Coronado Coal and Australian producer Jellinbah.

The line shutdown has added to supply concerns in the Asia-Pacific coking coal market. Heavy rains and storms have also hit other coal regions in Australia today, including Sydney and the Illawarra region in New South Wales.

"Suppliers have so far kept silent on the impact of the shutdown, which is fair because they probably are still assessing the impact themselves," an international trader said.

The onset of the wet season in Queensland usually pushes seaborne coking coal prices to record levels, with the highest so far at $304.25/t fob Australia in April 2017 when Cyclone Debbie brought heavy rains and flooded the coal delivery networks, even though mine production was hardly affected.

These weather conditions may potentially keep prices supported during a period when seaborne coking coal prices are being hit by weak Chinese demand because of strict coal import volume quotas imposed by Chinese authorities.