Bloomberg Power-Station Coal May Reach $150 a Ton on Bad Weather, Credit Suisse Says

Power-station coal may rise to $150 a metric ton in the “coming weeks,” driven by extreme weather conditions, before declining in the year, according to Credit Suisse Group AG.

“The unexpected cold weather so far this season has taken a toll on global energy inventories and reset energy prices to varying degrees,” Joachim Azria, a New York-based analyst with Credit Suisse, wrote in a report dated Jan. 10. “We expect coal prices to move above $150 in coming weeks and possibly higher if there are further significant disruptions to supply.”

Prices first rose because of a colder-than-normal winter in the Northern Hemisphere, prompting restocking by countries including China, Azria wrote. Further price increases were supported by supply fears because of heavy rains in Indonesia, Australia and Colombia, as well as floods in Queensland state, according to the Credit Suisse note.

Power-station coal at the port of Newcastle in Australia’s New South Wales, the benchmark for Asia, jumped 4.5 percent to $131.80 a ton in the week ended Jan. 7, according to IHS McCloskey. Prices may decline to about $120 a ton by the end of 2011, Azria said.