June 7, 2012 / 8:43 AM / 7 years ago

Asia Coal-Australia prices edge lower on waning demand

SINGAPORE, June 8 (Reuters) - Australia’s thermal coal prices inched down despite a recovery in Chinese interest, as buyers from the world’s second largest economy snapped up bargains, traders said on Thursday.

Amid the current supply glut and slower demand, coal producers, traders and end-users have grown increasingly worried about the possibility of more defaults in the market, which would give prices a further hammering in the near term and could start forcing some higher-cost miners to cut production.

Australia’s Newcastle spot index for the week closed on Wednesday at $91.72 per tonne, down slightly from $92 last week, data provided by online trading platform globalCOAL showed.

“The market continues to be bearish due to the lack of interest globally. This is despite savvy Chinese traders showing some interest and taking advantage of the down market,” said a Singapore-based market source.

China is the world’s largest producer and consumer of coal and with an average of 25 days of coverage of coal inventories, some in the market expect its imports may continue to fall.

Ship brokers Fearnleys said there could be at least 30 panamaxes anchored offshore China unable to offload their coal cargo because of high stockpiles at the ports.

Domestic prices in China fell for the fifth straight week, with benchmark steam coal prices at 768 yuan ($120) a tonne, down 0.78 percent, according a government-backed coal price index.

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\]

Coal tenders...

COAL PRICES

McCloskeys weekly 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> ($1 = 6.3635 Chinese yuan) (Reporting by Randy Fabi; editing by Miral Fahmy)

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