According to The Australian Financial Review, the extraordinary rally in coking coal prices is now pushing towards boom time territory, with the spot price for premium Australian coking coal rising more than 7 per cent overnight.
Top quality Australian coking coal was selling for $US289.30 per tonne this morning, having leapt from $US270 per tonne the previous day.
Coal isn't the only bulk commodity boosting government revenues; iron ore prices have also been stronger than expected in 2016, and a 4 per cent rise overnight pushed the price close to a seven-month high of $US67.43 per tonne.
Iron ore surged higher on the back of higher steel and iron ore futures in China, and was boosted by news that iron ore exports from Port Hedland jumped 14 per cent over the year to 41.6 million tonnes, reflecting strong demand in China.
The rally has been built on a range of coal supply cuts and interruptions, that have made it much harder to source coal shipments.
The biggest factor has been China's decision to limit the number of days that its domestic coal mines can work each year, but heavy rains, mine interruptions and derailments in Australia's coal heartland have also helped boost the price.
The price rally has come after several years of sliding prices and cost cutting by miners, which means these prices are being achieved with cost bases that are dramatically lower than during the boom years between 2005 and 2012.
Canadian miner Teck revealed in recent days that it was making profit margins of around $150 per tonne at current coal prices, and BHP Billiton and its partner in Australian coal Mitsubishi are likely to be making similar margins.
Negotiations for the first quarter of 2017 contract price are expected to begin soon, and Teck believes the price agreed could be better than the December quarter price.
The contract price peaked at $US330 per tonne in April 2011.
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