Asia Coal-Australia thermal coal prices up slightly, thin trade

PERTH Thu Aug 18, 2011 3:04pm IST

PERTH Aug 18 (Reuters) - Australia's thermal coal prices inched up slightly in the week to Wednesday, with little demand for spot cargoes as the nation's primary customers, Japanese buyers, continued to show less interest in spot cargoes.

Thermal coal on the globalCOAL Newcastle index, a benchmark for Asia, closed at $121.26 per tonne on Wednesday, up slightly from $119.66 a week earlier.

Australian suppliers have faced a weaker market since an earthquake in Japan knocked out some coal fired plants and damaged infrastructure, reducing demand.

In July, thermal coal imports in Japan were 14.6 percent lower than they had been during the same period a year earlier.

"Some Japanese utilities were receiving offers at a very aggressive price," one Australia-based trader said, but added that he had not heard of any utilities accepting the offers, in part because the offers were for prompt shipments and the buyers already had fully booked shipping schedules.

The thin market will likely help Japanese utilities negotiate better prices for long-term thermal coal contracts going forward, after settling their annual fiscal year contract at a record of just under $130 per tonne earlier this year.

Top thermal coal supplier Xstrata will head to Japan next week to begin negotiations for a much smaller annual contract beginning on Oct. 1 and analysts and traders said prices will likely dip given the recent softness in demand.

South Korean demand was also softer, with coal imports down 15 percent in July compared with a year earlier, according to government data.

In China, thermal coal prices dropped for the seventh week in a row to below $130 per tonne, but dwindling coal stocks may signal a rebound.

Chinese demand for imports is typically heavily dependent on domestic prices, with buyers considering imports only when they are at a discount to domestic prices.

Indonesian coal prices were also seen as weakening, with Indian buyers and Indonesian suppliers in a standoff on prices. Trade sources put Indonesian coal at around $50 per tonne FOB for 4,200 kcal/kg GAR coal and around $70 per tonne for 4,800 kcal/kg GAR coal.

ADDITIONAL REUTERS COAL COVERAGE:

Reuters coal data guide..............

All coal news........................

Power and gas news...................

RECURRING MARKET/DATA REPORTS

Australian spot prices..............

Australia Newcastle stocks..........

China monthly coal import/export....

Coal Freight prices.................

TRADES AND TENDERS

Spot trades...

Coal tenders...

COAL PRICES

McCloskeys weekly physical spot/freight prices..<0#MCC-CASH>

API4 coal paper prices, McCloskeys............<0#MCC-C-API4>

API2 coal paper prices, McCloskeys............<0#MCC-C-API2>

Indonesian Govt Coal Benchmark................<0#COAL-ID> (Editing by Himani Sarkar)

Economic Pulse

REUTERS SHOWCASE

Vodafone Tax Dispute

Vodafone Tax Dispute

India advised against challenging Vodafone tax ruling - source  Full Article 

Banking Sector

Banking Sector

India's laggard state lenders face tough sell on capital raising plan  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

Falling Oil Prices

Falling Oil Prices

Saudis signal no push for oil cut as market to "stabilise itself"  Full Article 

Raising Stake

Raising Stake

Nippon Life to raise stake in Reliance Capital fund unit  Full Article 

Sterilisation Camps

Sterilisation Camps

Sterilisation targets remain in all but name, critics say  Full Article 

Share Buyback

Share Buyback

Samsung Electronics to buy back $2 billion in shares  Full Article 

Microsoft in China

Microsoft in China

Microsoft to pay China $140 million for 'tax evasion'   Full Article 

Flashback: 26/11

Flashback: 26/11

The three-day attack in November 2008 left 166 dead.  Slideshow 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage