* Japan utilities push for coal contract renegotiation
* Chinese demand for coal begins to pick up
By Rebekah Kebede
PERTH, April 15 Australia's thermal coal prices,
a benchmark for Asia, were unchanged during the past week as
global miner Xstrata headed back up to Japan to
renegotiate annual thermal coal contract prices.
Australia's thermal coal on the globalCOAL Newcastle index
for the week to date was $123.25 per tonne on Thursday,
unchanged from a week earlier.
Xstrata and Chugoku Electric had settled the annual
thermal coal contract for the Japanese fiscal year starting
April 1, but some Japanese buyers wanted to renegotiate the
contract price, trade sources said. [ID:nL3E7EV499]
The contract was settled at $129.85, which some Japanese
buyers thought was too high. Typically, Japanese utilities
choose a representative company to negotiate the price for the
industry and subsequently agree as an industry to that price.
"The general feeling is that they will all fall in line,"
one Singapore-based market source said.
But others said some utilities were convinced they could
renegotiate a better price with Xstrata.
"They are not going down without a fight," one Sydney-based
trader said, adding that this was in part due to deals done
since Chugoku's settlement with Xstrata.
Some Newcastle coal was offered into Thailand this week well
below the globalCOAL index level, the trader said.
In addition, Newcastle coal was offered into Europe for May
delivery at $130 per tonne, with discounted freight of about $14
per tonne, in a sign that sellers may be motivated.
Meanwhile, physical demand in Europe remained weak, with
utilities having stockpiles for their summer needs.
In China, domestic thermal coal prices rose to a three-month
high of 790 yuan ($120.92) per tonne this week, while port
stocks fell for a sixth-straight session as power plants boost
inventories ahead of summer. [ID:nL3E7FE0BP]
This is buoying traders' hopes that the appetite for imports
will rebound significantly and Chinese appetite for Indonesian
coal did increase with several deals done for 3,800 kcal/kg NAR
coal, with prices in the mid-$80 range.
Traders will continue to watch for signs of Asian demand for
coal, particularly from Japan and China. One sign of weaker
demand in Asia is the reversal of a historical trend-- stronger
demand in Asia has kept Newcastle prices at a premium over South
African prices, but South African coal began to trade at a
premium to Newcastle prices this week, at least partly due to
Japan curbing or delaying imports.[ID:nLDE73C1Y6]
ADDITIONAL REUTERS COAL COVERAGE:
RECURRING MARKET REPORTS
European physical market............
European swaps market...............
Australian spot prices..............
North America coal market...........
STOCKS AND IMPORT/EXPORT DATA
Australia Newcastle stocks..........
S. Africa's Richards Bay stocks.....
TRADES AND TENDERS
McCloskeys wkly 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>
(Reporting by Rebekah Kebede; Editing by Clarence Fernandez)