Bloomberg reported that steelmakers in Japan may seek alternative sources amid concern about supplies after the worst floods in 50 years cut output from producers in Australia's Queensland state.

Mr Hiroshi Sato president of Kobe Steel Limited said that it is concerned about the impact of floods and may seek supplies from North America and Africa to make up for shortfalls. He added that "I expect there will be a big impact on the Japanese steel industry because of floods in Queensland."

Mr Shoji Muneoka president of Nippon Steel Corporation said that it will look into other regions to secure supplies if disruption continues.

According to data from Tokyo based Nippon Steel, Japanese steelmakers imported 58% of their coking coal requirements from Australia last financial year.

Mr Katsuya Takeuchi, an analyst at UBS Securities Japan Limited, said that steelmakers in Japan and South Korea hold about one and a half months of coking coal stockpiles on average and may increase reserves in anticipation of further disruption in supplies.

Contract prices for coking coal may rise to more than USD 300 a tonne because of floods in Australia's Queensland state. Mills agreed to pay USD 225 a tonne for hard coking coal under a three month accord starting January 1st 2011.

(Sourced from www.bloomberg.net)