PERTH Feb 15 Australian thermal coal benchmark prices dipped under $95 per tonne this week, as weak demand during the Lunar New Year holiday week outweighed several supply issues dogging the industry.
A rail worker strike against operator Asciano blocked 600,000 tonnes of coal from reaching ports, and there were labour-related supply disruptions in Colombia, where miners have been striking against the country's largest coal exporter this week.
Australia's Newcastle spot index slipped to $94.60 per tonne on Thursday, down from $95.95 per tonne a week earlier, data from online trading platform globalCOAL showed.
"Colombia is pretty much two-thirds out of the picture, but it's not having that much of an impact," one Brisbane-based market source said, adding that the market's shrugging off of the supply disruptions is indicative of just how oversupplied it is.
With Chinese buyers out of the market this week due to the Lunar New Year holiday, market sources said that some Australian producers had decided to hold out for what they hope will be higher prices next week.
"It's starting to get tight in the prompt months. Getting tonnes for March is pretty much impossible now," the Brisbane-based source said.
But indications are that China, the world's largest producer and consumer of coal, may have weak coal demand going forward, with a Reuters poll earlier this month showing that its coal imports will fall for the first time in five years.
In another sign of weak demand, South Korean coal imports in January fell 11.7 percent from the same month a year earlier.
Despite sluggish demand, producers may still manage to settle their annual thermal coal contract with Japanese utilities at above $100 per tonne, market sources said.
Xstrata typically sets the price with a major Japanese utility, often Tokyo Electric Power (TEPCO), negotiating on behalf of Japanese buyers, setting the precedent for the rest of the industry. (Reporting by Rebekah Kebede; Editing by Nick Macfie)