Asia Coal-Australia thermal coal prices inch up, market still thin

Wed Sep 14, 2011 4:00pm IST

* Market awaits Japan October contract for direction

* Chinese restocking demand picks up

By Rebekah Kebede

PERTH, Sept 14 (Reuters) - Australia's thermal coal price index dipped during the past week in a thinly traded Pacific coal market, with many buyers still waiting for Japanese utilities to settle their October supply agreement with top exporter Xstrata .

Thermal coal on the globalCOAL Newcastle index for the week to date closed at $123.76 per tonne on Tuesday, down from $124.41 per tonne a week earlier.

A 25,000-tonne parcel of Australian thermal coal for November delivery traded at $123.25 per tonne free-on-board on the globalCOAL platform on Tuesday.

Xstrata was in Japan, negotiating with utilities for their annual contract beginning Oct. 1, and sources said the market would likely remain range bound until a settlement is agreed.

"The market has gone quiet with regards to the ten million tonnes or so of negotiation into Japan and until that is done, I don't think you see this market move much," one market source said.

Most in the market expect the October contract price to come in slightly lower than that agreed for the primary annual contract beginning April 1, which was settled at just below $130 a tonne due to Japan's reduced coal consumption since the March earthquake that shut some coal-fired plants and damaged infrastructure.

Japan's coal consumption for August was around 7 percent less than for the same time last year, with fuel oil, LNG, and crude consumption increasing.

Chinese demand for coal was seen putting a floor on coal prices, however, with buyers back in the market looking for tonnes ahead of winter.

Chinese coal buyers continued to shop for Indonesian coal due to expectations domestic prices in the world's biggest producer and consumer of coal were poised to increase, but were bidding mostly below offer levels.

Chinese buyers were also seen shopping for 5,500 kcal/kg NAR Newcastle FOB coal, with bids around $97, and offers around $103, according to market sources.

Domestic coal prices in China were 826 yuan ($129.08) as of last Wednesday, according to the Bohai-Rim Bay thermal coal price index. ($1 = 6.399 Chinese Yuan)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Waning Enthusiasm

Waning Enthusiasm

Markets' post-election enthusiasm lost on consumers.  Full Article 

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Banking Sector

Banking Sector

Banks not allowed to trade in bonds for infra lending - RBI.  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Reuters India Mobile

Reuters India Mobile

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