US coal prices pass $100 a ton, twice last fall's

By Bruce Nichols

HOUSTON, May 9 (Reuters) - U.S. benchmark coal prices have passed $100 ton, twice levels of last fall when a world supply shortfall began driving markets, traders said Friday.

May CSX (CSX.N: Quote, Profile, Research, Stock Buzz) railroad coal with less than 1 percent sulfur settled at $102 a short ton Tuesday. May NYMEX barge coal with 1 percent sulfur ended at $100.50 a ton Thursday.

Prices as recently as last September were in the $50 range for both.

New upward pressure has come from U.S. utilities seeking to secure supply in the face of rising export demand, traders said.

"We're starting to see more and more domestic utilities come in and support values and make sure they've got quantity," a trader said.

"The challenge is there's not a lot of high-quality coal left," he said.

Southern Company (SO.N: Quote, Profile, Research, Stock Buzz) has moved into the market in a big way in the past two weeks, seeking long- and short-term coal for four utilities in its southeastern U.S. system.

Southern seeks up to 18.5 million tons of domestic or imported bituminous coal for up to four years beginning next January for power plants in Florida and Mississippi.