* Australian coal prices unaffected by wet weather
* Chinese buyers well-supplied, domestic price slips
By Rebekah Kebede
PERTH, Dec 9 (Reuters) - Australia’s thermal coal prices, the benchmark for Asia, were flat at around $111 per tonne, with the coal market so far little affected by wet weather in the Hunter Valley producing region.
Thermal coal on the global COAL Newcastle index for the week to date closed at $111.47 per tonne on Friday, flat from $111.26 per tonne a week earlier.
Thermal coal shipments from Newcastle port rose 55 percent in the week ended Dec. 3 to 1.92 million tonnes after a slowdown the previous week caused by planned maintenance and the wet weather.
Negotiations between Japanese utilities and Australian suppliers have started for the annual coal contract beginning January, with the Japanese utilities’ chief negotiator in Australia.
But with thermal coal prices soft, suppliers are not motivated to make a deal, especially since buyers settled the previous annual contracts at prices well above current levels.
The 2011 benchmark annual contract starting April 1, which represents most of the long-term coal volumes imported during the year, was settled at a record of $129.85 per tonne, while a smaller annual contract beginning in October was settled at $126.50 a tonne.
“It seems to be quiet. The suppliers are not in a hurry to set the price,” one broker said.
The January thermal coal supply contract typically represents about 10 percent of Japan’s annual imports, according to industry sources.
The temporary closure of the Orica explosives plant that supplies many Australian thermal coal miners raised some concerns among producers early on in the week, but the company said Thursday it was ready to restart the plant.
In China, the domestic coal price benchmark was slightly lower at 840 yuan($130) per tonne during the last week, down from 847 yuan the previous week, according to the weekly Bohai-Rim Bay thermal coal price index published Wednesday.
Chinese thermal coal inventories are currently hovering around 16 days and although utilities are already hunting for cargoes for late in the first quarter of 2012, they are not in urgent need of supply.
Coal import demand from China, the world’s largest producer and consumer of coal, may be dampened by the government’s move to cap benchmark spot prices with a heating value of 5,500 kcal/kg at 800 yuan a tonne beginning January.
Chinese import demand typically ramps up when domestic prices climb above the cost of importing coal.
A Reuters poll this week showed China’s utilities will import more than 120 million tonnes of thermal coal in 2012 as buyers seek out cheaper overseas supplies, but imports will grow at a slower pace as domestic demand moderates and home production rises. ($1 = 6.3619 Chinese yuan) (Additional reporting by Fayen Wong in Shanghai; editing by Miral Fahmy)