Asciano gathers steam but it's still a rough ride on the coal trains

AFTER a large drop in coal haulage this year, Australia's second-largest listed rail company, Asciano, has experienced a solid increase in demand in Queensland in the past two months.

But it is still warning that extreme volatility makes even short-term forecasts nearly impossible.

Asciano's chief executive, John Mullen, said the company had noticed a strong rise in demand for coal haulage in Queensland, its biggest market, in the past two months. "[But] it is extraordinarily difficult to predict at the moment . . . Queensland has been running at 300 per cent below where we should have seen it, and then suddenly we get a month that's a record," he said. "It makes planning capacity difficult."

Mr Mullen said it was a challenge to plan when even Asciano's large customers did not have a firm grip on the short-term outlook.

"Into the first quarter of this financial year it became much more erratic. As a nation we talk ourselves into it so quickly. We have had investors saying, 'Has Australia stopped exporting coal?'," he said.

David Irwin, head of Asciano's Pacific National Coal division, said the higher demand seemed to be due to a "slight turn in the market and there has been a little more buying opportunity going on".

"It's pretty common across all of the producers that their level of production and sales are going up," he said. "It is positive . . . and we hope it continues."

Coal volumes at the rail operations in Queensland had fallen up to 30 per cent earlier this year. But, in a sign of the extreme volatility, Pacific National hauled record-breaking amounts of coal from mines to port terminals at Mackay last month.

Asciano is vying with Aurizon, the rail company formerly called QR National to haul about 65 million tonnes of coal in the next two years for the BHP Mitsubishi Alliance.