Asia thermal coal price near floor -Chubu Electric unit
NAGOYA, Sept 6 |
NAGOYA, Sept 6 (Reuters) - Asian thermal coal prices are near their floor and any further steep price fall is unlikely, the head of Chubu Energy Trading Singapore Pte Ltd (CET), a coal trading unit of Japan's second-biggest coal buyer Chubu Electric Power Co, said.
"At around the per-tonne $90 level, we are beginning to see miners being forced to produce coal below cost," Kazunori Kasai, managing director of CET, told Reuters on Thursday.
"The price could temporarily dip below $90, but a drastic fall, say 20 or 30 percent, is unlikely to occur as global production cuts and job cuts begin to take effect," Kasai said.
Australia's Newcastle spot index closed at $90.93 for the week ended Aug. 31, down 20 percent since the start of 2012, as China's demand has cooled.
CET, which is owned jointly with France's EDF, moved its office in Singapore in April to boost its trading and to cut Chubu's fuel costs by achieving closer communications with its clients and shippers.
Its coal sales to utilities other than Chubu are gradually increasing, Kasai said.
He expects to sell nearly 1 million tonnes of coal to Japanese and South Korean utilities in the 2012 financial year, about the same as in 2011, up from 500,000 tonnes in 2010.
The parent Chubu Electric, Japan's third largest power utility, buys half the coal it needs, or 5 million tonnes a year, from CET. The rest is secured on long-term contracts at annually fixed price.
Chubu burns 10 million tonnes of coal a year to feed its 4,100 megawatt Hekinan plant, Japan's biggest coal-fired plant.
It has other other power stations using different types of fuel. (Reporting by Yuko Inoue; Editing by Anthony Barker)
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