coal prices jump towards us140

Coal prices jump towards $US140
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Australian thermal coal prices, a benchmark for Asia, rose to a 13-week high to top $US138 a tonne in the latest week, extending a three-week rally that was spurred by strong global demand amid high oil prices.

They rose $US3.50 from a week earlier to $US138.35 a tonne, the globalCOAL's NEWC weekly index showed in the week ended May 24, based on prices at Australia's Newcastle port, the world's largest coal export terminal.

"Record high oil prices are lifting prices across the energy complex. There is also stronger coal demand from utilities around the world, particularly Europe,'' said Mark Pervan, a senior commodities analyst at ANZ Bank.

"Supplies in Australia, China and Russia are also very tight, so that's providing a lot of support.

High oil prices, which struck a life high of $US135.09 a barrel last week, along with record high gas prices have prompted more European utilities to turn to coal for power generation.

In Asia, producers and traders said demand from North Asian utilities was also robust, with some South Korean utilities quietly seeking for more spot cargoes.

"Freight rates have eased from record highs last week so some buyers are taking the opportunity in this window period to seek more supplies,'' said a sales manager of an Indonesian producer who asked not to be identified.

A 30,000 tonne parcel of Australian coal for August delivery was traded on Friday at $US142 a tonne FOB Newcastle on electronic trading platform globalCOAL.

Industry sources said exports have also fallen in China, where coal shortages have forced 39 Chinese power plants to shut generation and fueled a spike in domestic coal prices.

Coal stockpiles are also below a government-set minimum level at seven days' supply in several parts of the country, the State Electricity Regulatory Commission said in a statement on its website.

China's safety and environment measures ahead of the Olympic Games are also hampering coal production and transport, giving a further boost to the fuel's prices, which are already at record highs.

ANZ's Pervan said lower coal exports from Russia, as a result of increased imports from Poland, was worsening the global supply tightness, while growing ship queues at Australia's Newcastle port was also crimping supplies.

Reuters