(Refiles to fix date)
By Rebekah Kebede
PERTH, March 23 Australia's thermal coal prices,
a benchmark for Asia, extended their decline during the past
week as near-term weakness in Japanese demand weighed on the
But traders said prices may have bottomed out, as coal
cargoes turned away from some Japanese utilities found homes.
Thermal coal on the globalCOAL Newcastle index for the week
to date was $122.98 per tonne on Tuesday, down from $126.32 a
week earlier and from $123.29 on Friday.
Prices have fallen by more than 5 percent since a deadly
earthquake and tsunami hit Japan in early March, as at least two
major Japanese utilities declared force majeure on deliveries
due to damaged ports and shut power plants.
But excess supplies have largely found homes with other
Japanese utilities, or swapped with other buyers in the region
such as South Korea.
On Wednesday, bids stood at $123.50 for May deliveries,
$124.50 for June, and $127.00 for August, indicating an uptick
in buying interest.
The globalCOAL index also showed signs that prices may be
hitting bottom, with the index for the week to date on Tuesday
moving up about 90 cents from the week to date index on Monday.
"I don't think excess cargoes will continue stressing the
market," said one Singapore-based source.
"They are finally finding destinations (for the cargoes) and
there is no more prompt price impact."
Exports out of Australia's biggest thermal coal export
terminal dropped in the week ending March 21 as rail maintenance
and some weather impacts on mine production reduced
Russian thermal coal shipments to Japan are still continuing
with little interruption, exporter sources said.
Buying interest from China, the world's biggest producer and
consumer of coal, remained low, despite Chinese buyers picking
up a few shipments destined for quake-hit Japan.
China's thermal coal prices slid to 775 yuan ($118) in the
latest week on the back of abundant supplies, as output rose in
many key coal provinces and domestic prices remained below
international levels despite the drop in near-term Newcastle
The coal market will be focused on Japan's recovery from the
earthquake in early March, in particular the recovery of several
coal-fired power plants to determine Japan's coal demand in the
short- to medium-term.
The market will also have its eye on the nuclear crisis in
Japan to search for an indication of whether nuclear energy will
After a brief hiatus following the quake, Xstrata is
expected to meet with Japanese utilities, represented by Chugoku
Electric Power , this week to negotiate their annual
thermal coal contract, which will start on April 1. The contract
price, which serves as a benchmark for much of Asia, is likely
to settle around $130 per tonne, said traders and analysts.
ADDITIONAL REUTERS COAL COVERAGE:
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\]
McCloskeys weekly physical spot/freight
API4 coal paper prices, McCloskeys............<0#MCC-C-API4>
API2 coal paper prices, McCloskeys............<0#MCC-C-API2>
(Editing by Ramthan Hussain)