| PERTH, Sept 6
PERTH, Sept 6 Australia's thermal coal price
index rose to over $124 per tonne in the week ended Monday as
buying interest, especially from China, began to pick up and
Australian coal supplies showed signs of tightening.
Thermal coal on the globalCOAL Newcastle index for the week
to date was $124.13 per tonne on Monday, up from $121.50 per
tonne a week earlier.
A 25,000-tonne parcel of Australian thermal coal for October
delivery traded at $123.50 per tonne free-on-board on the
globalCOAL platform on Tuesday, up from $121 per tonne paid for
a 25,000-tonne parcel in late August.
"In general it seems the overhang of excess coal in
Newcastle-- 6,000 kcal/kg coal-- that we saw in the third
quarter is starting to disappear," one Sydney-based market
Exports of coal from Australia's Newcastle port, which
handles most of the country's thermal coal exports, increased
18.4 percent in the past week.
Demand for the standard 6,000 kcal/kg NAR Australian grade
coal with low ash content was thin, with Australia's primary
coal customer, Japan, still seeing weakened demand due to the
March tsunami that knocked some of its power plants and ports
But demand for higher ash Australian coal that does not meet
the standard Newcastle specifications, also known as
"off-specification" coal, was up.
"There's been a reasonable interest in Australian off-spec
coal, mainly from China... it is providing a floor to the
Newcastle price and there is quite a bit of that moving," the
Sydney-based source said.
Chinese inquiries for coal were up, with domestic prices in
the world's largest energy consumer between 820 yuan
($128.41)and 830 yuan ($129.98) per tonne for 5500 kcal/kg coal.
Last week, sources said a Chinese importer of thermal coal
also bought a prompt cargo of standard-grade South African coal
at $129.50 a tonne CFR, a deal made possible by low freight
rates and FOB Richards Bay South African prices, which dipped
late last week to $115 a tonne.
Still, China's coal imports this year are expected to pull
back from the record level in 2010 despite strong domestic
demand, as growth in local production and transportation
capacity help meet overall demand.
Top thermal coal exporter Xstrata has begun
negotiations with Japanese utilities for their annual contract
beginning Oct. 1, but has not yet agreed on a price with
Xstrata's offer at $127.50 per tonne and the utilities
countering with $125 per tonne, sources said.
In their last negotiation, which began before the quake in
Japan, and was settled soon thereafter, Japanese utilities
agreed to a price just below $130 a tonne for the annual
contract beginning April 1, the primary supply contract for the
($1 = 6.386 Chinese Yuan)
(Additional reporting by Fayen Wong in Beijing; Editing by