* China coal imports weaken in Q2 - trade
* Stocks at power plants hover at 20-days of consumption
* Inventories at China coal mines climb
* Domestic price falls prompt buyers to hold off purchases
By Fayen Wong
BEIJING, April 17 China's thermal coal demand
has stalled and imports are set to fall this quarter, producers
and traders say, removing the main prop of the Asian market and
threatening to cut already weak benchmark Australian coal
Utilites are sitting back and waiting for import prices to
match a falling domestic market as supplies remain plentiful
during a seasonal demand lull.
Inventories at power plants are enough for three-weeks worth
of consumption and stocks are expected to stay high as utilities
had already booked a sizeable amount of April-arrival cargoes in
the past month.
The sustained fall in domestic coal prices means that the
landed price of imports became more expensive than local
supplies last week, reversing a discount of 10-20 yuan a tonne
that lasted most of February-March, traders said.
China overtook Japan as the world's top coal importer in
2011. Faced with an oversupplied market, Asian producers are
banking on continued strength in its imports to help support
Australian thermal, or steam, coal prices that have already shed
18 percent from year ago to hover at around $89 a tonne.
"In the past, we would start looking at booking summer
supplies by around April but we haven't signed anything this
year because utilities aren't keen to buy," said a
Miners in major coal-producing province Shaanxi have already
slashed ex-mine prices by 10-20 yuan per tonne due to poor sales
and rising inventories, trade sources said.
Stocks at major coal mines hovered at 44.2 million tonnes at
the end of March, up nearly 25 percent from 35.8 million tonnes
in January, data from the Coal Transport and Distribution
Association showed. Stocks were at 33.9 million tonnes a year
"If domestic prices fall further, overseas prices will have
to follow. Some producers are holding out for higher prices but
I think that's wishful thinking," said a Singapore-based coal
Chinese coal prices for immediate delivery slipped 1 yuan to
615 yuan ($99.46) a tonne on Wednesday, according to the
benchmark Bohai-Bay Rim index. Coal at the Australian port of
Newcastle, a benchmark grade for Asia, stood at
$88.35 a tonne on Tuesday.
Sources said Chinese buyers are bidding around $80 a tonne
CFR for May-arrival Australian coal with heating value of 6,000
kcal/kg, but sellers are offering around $83 a tonne.
"The price gap is too wide to get any deals done. Overall
sentiment in China is also bearish, so buyers are waiting for
credible signs of improving demand before they move," said an
Indonesian coal producer.
China's economic recovery stumbled in the first three months
of 2013, as the annual rate of growth eased back to 7.7 percent
from the 7.9 percent pace set in the final quarter of last year.
Weak industrial output is expected to limit China's power
consumption growth at between 4-6 percent in 2013, compared with
a growth of 5.5 percent last year, an official from the China
Electricity Council said on Tuesday.
($1 = 6.1831 Chinese yuan)
(Editing by William Hardy)