Industry consultant Steel Market Intelligence said that US steelmakers Nucor Corporation, Steel Dynamics Inc and Commercial Metals Co will benefit from higher coking coal prices pushing up competitors' costs.

According to Macquarie Group Limited, flooding in Queensland closed mines and disrupted coal shipments. Queensland accounts for about 50% of coking coal exported by sea and prices are set to increase.

Ms Michelle Applebaum managing partner at Steel Market Intelligence in Chicago said that US steelmakers are less exposed than global rivals to higher coal prices. He added that "The net effect should be a bit of competitive advantage and ultimately margin enhancement for domestic mills."

Mr Colin Hamilton, an analyst with Macquarie in London, said that shipments from Queensland will likely be further disrupted as heavy rain is predicted to continue in 2011.

According to data compiled by Bloomberg, Australia exported 132 million tonnes of coking coal in the first 10 months of 2010, 80% of which was shipped to Asia.

Nucor is the biggest US steelmaker. The company, along with Fort Wayne, Indiana based Steel Dynamics and Irving, Texas based Commercial Metals, has capacity to recycle steel scrap. Remelting scrap doesn't require coking coal.

(Sourced from www.bloomberg.net)