Asia Coal-Prices hovers around $78/T, seek direction

Kalimantan Coal

PERTH, Feb 9 (Reuters) – Prices of power-station coal from
Australia, a benchmark for Asia, hovered around $78 a tonne
amid thin trade on the physical spot market. Several coal tenders from North Asian utilities, either due
to expire or to be awarded this week, would help give some
price direction, traders said. Thermal coal prices on the globalCOAL Newcastle weekly
index fell $4.98 from a week ago to $78.17 a tonne in the week
ended Feb. 7, but they were up about 62 cents from the middle
of last week. “The market is quite slow, there’s not much happening at
the moment. People are going to look at tender results to gauge
sentiment and for price direction,” said a Sydney-based trader. Korean Southern Power Co Ltd (KOSPO) is expected to award
its tender for 500,000 tonnes of coal later this week, while a
closed tender by Japanese utility TEPCO seeking two panamaxes
for the period of April 2009 to March 2010 will close on
Tuesday. The recent fall in Asian coal prices is beginning to draw
more utilities out into the market as they take the opportunity
to secure additional tonnage ahead of annual term contract
negotiations. “Some of the utilities are trying to cut back the volumes
in term contracts and get more spot cargoes in the market,”
said a trader. Despite recent sluggish demand, traders said Australian
coal prices continued to hover above $75 a tonne as supplies at
the coal-rich Hunter Valley region in New South Wales remained
tight due to production issues at some mines. Rains have also slowed production in Indonesia’s Kalimantan
region, also offering some support to prices.
(Reporting by Fayen Wong; Editing by Michael Urquhart)


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