Thermal coal prices on the rise
It is reported that strong Chinese demand ahead of the peak summer season lifted Australia thermal coal prices, a benchmark for Asia, in the week to May 3rd 2011.Thermal coal on the globalCOAL Newcastle index for the week to date was USD 122.75 per tonne on May 2nd 2011, up from USD 122.23 last week and USD 122.27 on April 29th 2011.
A Singapore based coal trader said that "There is some upside on Chinese demand as there is a shortage of coal everywhere in the country. China faces low coal stocks for electricity and power demand will be increasing with summer around the corner."Lofty steam coal prices in China and a worsening power shortage in the world’s second largest economy is set to boost imports of the fuel from Indonesia and Australia over the summer months, ending months of muted demand.
Rising domestic prices, which rose steadily over April to a four month high of CNY 820 a tonne last week, have reopened the arbitrage window for Indonesian and some off spec Australian coal.
China’s coal imports are expected to rebound to 10 to 13 million tonne per month in coming months, as generators speeded contract signing these days after price gap narrowed between overseas and domestic products, seen analysts. Trader sources believe recently contracted tonnages are amazing following price weakening in Indonesia.Deliveries under these deals are understood to have started in late April, which is to boost the month’s performance, following 9.05 million tonne in March and 6.76 million tonne in February. They revealed that offers from Indonesia and Russia have increased sharply since early April. It’s believed that Indonesia products settled in April are priced in the range USD 108 to USD 110 per tonne CFR, basis 5,300kc NAR, while Russian products are traded at USD 122 to USD 125 per tonne CFR, basis 6,000kc NAR.
However, coking coal imports are projected to shrink due to a continued huge price gap following Australia’s floods at end 2010. Insiders say Sino-Australian coking coal Q2 prices were settled at USD 320 to USD 330 per tonne but business is extremely thin, when domestic products cost just USD 261 per tonne for a user in eastern China.
However, coking coal imports are projected to shrink due to a continued huge price gap following Australia’s floods at end 2010. Insiders say Sino-Australian coking coal Q2 prices were settled at USD 320 to USD 330 per tonne but business is extremely thin, when domestic products cost just USD 261 per tonne for a user in eastern China.
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