* Market awaits Japan October contract for direction
* Chinese restocking demand picks up
By Rebekah Kebede
PERTH, Sept 14 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)
Trending On Reuters
Indian conglomerate Adani Group has started building the country's first transshipment port, conceived 25 years ago, and the government will construct another $4-billion facility nearby to create a shipping hub rivalling Chinese facilities in the region. Full Article