* Chinese buyers out of market, enquiring Apr-May delivery
* Australian prices supported by term negotiations
* Xstrata seeking $125/T from Japanese utilities for 2012
By Fayen Wong and Rebekah Kebede
SHANGHAI/PERTH, Feb 24 Australia's thermal
coal price benchmark fell for the fourth week to around $106 a
tonne this week, as key buyers stayed away and sellers face
price pressure in an oversupplied market, but annual price
negotiations with Japanese buyers lent support.
Thermal coal on the globalCOAL Newcastle index for the week
to date closed at $116.69 a tonne on Thursday, down from $118.07
a week earlier.
With Chinese utilities having bought enough coal for winter
heating and March being a period of traditional demand lull,
traders said Chinese buyers are enquiring on deliveries for
April and as late as May.
"They're now looking ahead at the next buying cycle and are
hoping to book some while prices are still weak," said a trader
"The prompt market is pretty dead at the moment and the bids
we've received so far for off-spec Aussie coal is around $103 a
tonne (CFR) China."
The off-specification coal he was referring to was that with
heating value of around 5,500 kcal/kg (NAR) and ash value of 20
Despite the tepid demand, traders said annual prices
negotiations between Australian producers and Japanese utilities
were helping to keep a floor on prices.
Xstrata Plc, the world's largest thermal coal
exporter, is seeking around $125 a tonne for a term contract
starting in April.
"The final price could be around $120 per tonne, but still a
bit high compared to the current curve," one market source said.
Newcastle coal for delivery in the second quarter is
currently hovering at around $111-$112 a tonne (FOB).
CHINA PRICES FALL FOR 14th WEEK
In China, the world's largest coal consumer, prices on the
government-backed Bohai Bay Rim index fell for the 14th
consecutive week by 0.26 percent to 775 yuan a tonne ($120).
However, some traders said the lower rate of decline, along
with the stabilising of prices of some coal grades at key port
Qinhuangdao suggested that the near 3-month slide in prices
could be nearing an end.
"It will still take some time for utilities to burn down
their stockpiles but domestic freight rates are beginning to
tick up and that's a good sign," said a second trader in China.
Domestic freight rates from key port Qinhuangdao to
Guangzhou rose to 38.40 yuan a tonne, shipping data showed.
China's January coal imports fell 8 percent from the
previous month to 19.65 million tonnes in a second straight
month of declines, official customs data showed on Tuesday, hit
by lower domestic prices and slowing economic growth.
Excluding lignite, which the customs agency has just
included in its monthly breakdown of import data, China's coal
imports were at 16.4 million tonnes, down 23 percent from
December's 21.4 million tonnes.