PERTH Aug 18 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.
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