asia coal-prices climb toward $91/t

http://www.cnbc.com/id/48078419

Asia Coal-Prices climb toward $91/T, Chinese coal extends fall
Published: Thursday, 5 Jul 2012 | 7:19 AM ET

SHANGHAI, July 5 (Reuters) - Prompt Australian thermal coal prices crept up to above $90 a tonne during the week boosted by paper activities, but traders said signs of improving demand from China and some spot buying from South Korea had helped to stabilise prices.

Chinese buying had picked up slightly, but importers were mostly interested in international supplies offered at cut-throat prices and spurned recent higher offers.

Australia's Newcastle spot index

for the week closed at $90.60 per tonne on Thursday, up from $89.90 the previous week, data provided by online trading platform globalCOAL showed.

"There's been an uptick in trading activity but I'd say the move towards $91 is largely driven by paper trades," said a Singapore based trader.

A 25,000-tonne parcel of Newcastle coal for September-loading traded onscreen on Wednesday at $90 per tonnes on a free-on-board (FOB) basis, after a similar-sized October-loading parcel traded at $90.50 on Tuesday.

Other traders said South Korean utilities had also bought some spot cargoes from Australia, helping to buoy prices.

China's benchmark thermal coal prices extended its losing streak and slid 3.7 percent to 676 yuan ($110) a tonne.

Chinese coal prices have dropped 111 yuan since the start of May as the flood of cheaper overseas supplies has pressured the domestic market.

"Stocks at ports and power plants have begun to fall slightly, so some utilities are now ready to buy and that has brought traders back into the market," said a Shanghai-based source.

"But that doesn't mean things are looking all rosy. Utilities still have fairly fat stocks so it's not like they'd be eager to buy whatever comes along."

Chinese traders are willing to pay about $85 per tonne on a landed basis for high-ash Australian coal with a heating value of 5,500 kcal/kg (NAR) for delivery in August-September, however offers have already crept higher around $89 a tonne over the past week.

Coal stocks at Qinhuangdao Port slipped to 8.87 million tonnes as of July 2, down slightly from 8.93 a week ago, according to data from the port.

($1 = 6.3477 Chinese yuan)

(Reporting by Fayen Wong; editing by James Jukwey)