| PERTH, April 29
PERTH, April 29 Australia's thermal coal prices,
a benchmark for Asia, rose slightly in the week to Friday, while
in China coal buying began to ramp up on power demand as summer
Australia's thermal coal prices on the globalCOAL weekly
index, a benchmark for Asia, closed at $122.23 per tonne for the
week to date on Thursday, up from $121.48 a week earlier.
Newcastle coal for July delivery traded at $123 per tonne
for 25,000 tonnes, while the same tonnage for the fourth quarter
traded at $126 and $127.25 per tonne.
"China is definitely the lead player in the market at the
moment," one Singapore-based trade source said.
Chinese buyers have been buying up Indonesian coal, which is
generally cheaper than Newcastle coal, since the end of March
when Chinese domestic prices rose enough to make imports
Power demand from factories and increased construction
activity pushed up China's thermal coal prices for the fourth
straight week, with growing warnings of a summer fuel shortage
boosting daily prices to a five-month high of 815 yuan
Despite the increase in coal imports, China will likely
face electricity shortfalls of around 30 gigawatts this summer,
a supply gap which could widen. [ID:nL3E7FS2O4]
The buying follows a long spell during which China, the
world's largest consumer and producer of coal, virtually stopped
imports due to higher international prices.
But Australian coal prices are still too high to attract
buyers, even for "off-spec" material.
"For the Newcastle standard, the arbitrage is still closed,"
another Singapore-based market source said, but added that
Chinese buyers could soon be interested in off-spec material
with 5,500 kg/cal coal bids and offers just $2 to $3 away.
Still, Chinese demand will keep Newcastle prices supported,
the Singapore-based market source said.
"Prices were bearish, but China is supporting the Indonesian
market, so I don't think Newcastle prices will drop in the next
couple of weeks," the source said.
Traders will continue to watch Chinese demand closely for
hints of any widespread buying that could push up prices
region-wide, especially with government officials saying that
China must brace to cope with power shortfalls as the country
enters the high energy-consuming summer months. [ID:nL3E7FP2VT]
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 Spot trades... [COAL/TRADE\]
McCloskeys weekly physical spot/freight
API4 coal paper prices, McCloskeys............<0#MCC-C-API4>
API2 coal paper prices, McCloskeys............<0#MCC-C-API2>
($1 = 6.512 Chinese Renminbis)
(Reporting by Rebekah Kebede)