Green Markets

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Coal for immediate delivery at Newcastle declined 2pc to $68.57/tonne two weeks after record prices of $72.37 reached

Posted by gmarkets on 10 September, 2007

Coal for immediate delivery at Newcastle declined 2 per cent, or $1.38 to $68.57 a tonne in the week ending August 24, according to the globalCOAL NEWC Index, reported The Australian (1/9/2007, p. 10). Rain and earthquake affect price: Prices reached a record of $72.37 two weeks earlier, the newspaper reported. Demand for coal used in power generation plants reached its summer peak in China, Japan and South Korea in July and August as airconditioning usage rose. Supplies became tight when heavy rain caused some Indonesian producers to declare force majeure and an earthquake in Japan on July 16 led to Tokyo Electric Power, Asia’s biggest power producer, increasing the use of generators fired by coal and gas to compensate for output lost after the closure of a nuclear plant.

Supply tightens: Rio Tinto, BHP Billiton and Xstrata Plc had been unable to increase shipments enough to fulfill orders after China boosted imports and cut exports to meet demand, The Australian said. The number of ships waiting to load coal at Newcastle fell to 50 this week Newcastle Port Corporation said on its website. Vessels waited an average of 19.7 days to load coal compared with 19.3 the week before, it said. Straits Asia Resources, a Singapore-listed company with coal mines in Indonesia, announced on July 31 it would miss shipments and had yet to lift its force majeure.

Demand booms: China’s coal imports surged 50 per cent to 30.96 million tonnes in the first seven months while exports fell 21 per cent to 28.86 million tonnes, the customs administration said mid-month. Korea Midland Power, a unit of South Korea’s largest utility, was seeking 360,000 tonnes of thermal coal for delivery in the fourth quarter for its Boryeong power plant, according to tender documents sent out to traders recently. Korea Southern Power wanted 300,000 tonnes of thermal coal for October to March 2008 delivery, according to its website.

The Australian, 1/9/2007, p. 10

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