SYDNEY, Feb 7 (Reuters) - The decline in prices of Australian thermal coal accelerated this week, exacerbated by ample inventories in China and subdued activity during the Lunar New Year holiday break.
The Newcastle weekly spot index fell to $80.01 per tonne from $81.52 on Jan. 24, latest data from the online trading platform globalCOAL showed.
The index has been in steady decline over the past six weeks, losing more than 7 percent since Dec. 29.
Shipping mostly returned to normal at Australian ports in Queensland state after being suspended late last month due to a cyclone that made landfall near metallurgical and thermal coal collieries in the Bowen Basin.
Glencore Xstrata, which operates the Abbot Point terminal that services the Bowen Basin coal deposit, began loading its first ship early on Saturday.
Other coal miners to resume loading and shipping during the week included BHP Billiton and Peabody Energy Corp.
The average price of steam coal ended at 584 yuan ($96.37) per tonne. This was a decrease of 7 yuan ($1.16) per tonne versus the previous weekly reporting period, according to the Bohai Rim index.
Bulk commodity prices softened in January, driven by the end of the restocking phase and seasonally weak steel production - which contributed to weaker demand trends for coal, according to analysts.
National Australia Bank senior economist Gerard Burg noted in a client report that expanding rail freight capacity in China threatened the country's demand for seaborne coal, particularly thermal.
"This could effect longer term prospects for thermal coal markets, where China has switched from being a major exporter to the world's largest importer in the space of a decade," he said.
Also, softer seasonal demand and adequate stockpiles at ports and electricity generators are contributing to an easing in thermal coal spot prices, according to Burg.
Relative weakness in spot prices signals likely declines in Japanese financial year contract prices, he said.
Chinese buyers, who had largely retreated from the market by the Lunar New Year holiday break that ended on Thursday, were likely to be more active next week.