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Tuesday, 22 September 09
ASIA COAL-PRICES TOPS $70 AS TRADERS SEEK BARGAINS


Reuters reported that, prices of power-station coal in Australia, a benchmark for Asia, rose for the second week to top $70 a tonne this week, clawing back some of the month's earlier losses, amid increased buying.

Industry sources said traders have resurfaced after prices dropped to their weakest level in 3-½   months, and the buyers were likely hoping that the cargoes could be resold at a higher price in the coming months amid stronger winter demand and tight Australian supplies.

Thermal coal prices on the globalCOAL Newcastle weekly index, a benchmark for Asia, rose $3.30 last week to $70.18 a tonne on Tuesday, based on FOB prices at Australia's Newcastle port.

"Traders are hoping some utilities would be caught short over the coming winter months. Supplies could be tight then since most Australian producers have also sold out their coal for the fourth quarter and Indonesia typically enters the rainy season," said an Australia-based trader.

Three parcels of Australian coal for December delivery were traded at between $71.75-$72.25 a tonne FOB last week on electronic platform globalCOAL, while two more parcels for November delivery were traded at $69 and $70 a tonne each on Monday.

Analysts said Asian prices were also being supported by firm thermal coal prices in China, which would encourage Chinese utilities to seek cheaper supplies overseas.

"China domestic coal prices have held up around $85 per tonne for the past three months, suggesting lower prices are unsustainable for local suppliers and have encouraged imports," the Australia & New Zealand Bank said in a note.

China's coal imports fell to 11.774 million tonnes in August, down 15 percent from 13.887 million tonnes in July, the General Administration of Customs said on Tuesday.
Source: Reuters



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