The consequences of the Australian flood for the international steel production and industries like automotive look like a symbol for something, but I’m not too sure for what. Climate change?
Recap: 2010 ended with unusually heavy rainfall in Queensland, eastern Australia. The resulting flood hit about one million square kilometres, unsettled thousands of people and is on the best way to completely upset the world’s economy which is still a bit off-colour.
According to the BBC, Queensland produces about half of the world’s coking coal used to make steel. More than 75% of the territories’ mines have ceased operation due to the flood, states Anna Bligh, Queensland's premier. Additionally, railway lines that are used to transport the coal to harbours are unusable as well. Now, steelmakers around the globe are in trouble: No coal, no steel.
(Unhappy with the current situation: Anna Bligh, premier of Queensland)
Since nobody knows how long clean-up operations are going to take, the future of coking coal proliferation is unpredictable. Not just Asian steelmakers, where Australian coal has a share of 80% are extremely dependent, European and US steel mills are facing trouble, too. The race for alternative coal suppliers has started, but it’s going to be difficult to fill the gap.
Japanese and European car manufacturers are already talking about having to raise prices, a potential problem for the recovering automotive industry in a still fragile economy.
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