| PERTH, March 30
PERTH, March 30 Australia's thermal coal prices,
a benchmark for Asia, dipped slightly as the short-term drop in
Japanese coal demand kept pressure on prices after a deadly
earthquake earlier this month.
Australia's thermal coal prices on the globalCOAL weekly
index, a benchmark for Asia, closed at $122.02 per tonne for the
week to date on Tuesday, down slightly from $122.98 a week
The earthquake and subsequent tsunami in Japan shut several
power plants and ports and forced at least two major utilities,
Tokyo Electric Power and Tohoku Electric to
declare force majeure on coal deliveries.
Indonesian coal shipments totalling 500,000 tonnes were
delayed due to the quake and about 5 million tonnes on
Indonesian coal will be delayed during the year. [ID:nL3E7ET165]
Japan is Indonesia's largest coal customer. Japan's
utilities have rerouted coal cargoes to domestic utilities as
internationally, particularly to South Korea and Taiwan.
Available supplies of Australian coal also increased during
the past week, with exports of coal from Australia's largest
thermal coal port increasing 10 percent in the week ending
"There has been some Newcastle coal that has been freed up,
we've seen some tonnes back in the market which may not
necessarily be a sign of Japanese force majeures, but that the
Australian scenario might be improving," one trader in Singapore
Most of Australia's coal is produced in New South Wales,
where production has slowed in the last months due to wet
weather, although mines in the region escaped the large-scale
deluges that hit neighboring Queensland state.
But traders and analysts said pressure on prices will be
"The recent spot correction simply reflects the impact of
tonnes diverted from damaged Japanese ports and utilities to
India and China; once this trade re-balances, spot should return
to pre-event levels," Tom Price, an analyst at UBS in Sydney
said in a note.
China, the world's largest producer as well as consumer of
coal remained on the sidelines of thermal coal trade, with the
arbitrage shut as domestic thermal coal prices nudged up to 780
yuan ($118.82) in the latest week.
Utilities and other end-users were re-entering the market to
replenish stockpiles ahead of a month-long scheduled maintenance
of a main rail line, but prices were still too high for any
serious buying interest from China in the international
European coal prices also slipped in thinner trading and
higher offers from European utilities.[ID:nLDE72S20Q]
Xstrata met with Japanese utilities to restart the
annual thermal coal contract negotiations last week after the
talks were interrupted by the earthquake.
The utilities will be represented Chugoku Electric Power
and market sources said they anticipated that the talks
could drag on for several weeks and be settled well after the
April 1 start of the Japanese fiscal year, when the thermal coal
contracts are set to begin.
Estimates of the contract price, which serves as a benchmark
for much of Asia, range from just under $130 per tonne to around
$140 per tonne.
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 prices..<0#MCC-CASH>
API4 coal paper prices, McCloskeys............<0#MCC-C-API4>
API2 coal paper prices, McCloskeys............<0#MCC-C-API2>
(Reporting by Rebekah Kebede; Editing by Ed Lane)