RE:Production starts in December The road back down for this year's best-performing commodity may be bumpy.
While spot prices for coking coal have dropped about 16 per cent this month from a record high above $US300 a tonne, possible heavy rain and flooding in Australia over the next few months may stall, or even reverse, the decline.
The region is forecast to see an above-average number of tropical cyclones this season and disruptions may blunt the impact of rising output from China, the world's biggest producer, which reached the highest in a year last month.
China's effort to curb production helped to tighten coal supply, leading to a near quadrupling of the spot metallurgical price this year and making it the best performing commodity in 2016.
The surge has been a boost to miners, with recent contract negotiations between producers and Japanese steelmakers resulting in the fourth quarterly gain and the highest accord since 2011.
"The industry remains vulnerable to a weather event in the next couple of months," said UBS analyst Daniel Morgan. "I don't think we're going to see a rapid price decline in the near-term because supply is still tight and there is an Australian wet season to navigate."