* 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
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
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
($1 = 6.399 Chinese Yuan)