Asia-Pacific coal prices have begun the year on a bearish note with demand from key importing nations relatively subdued, and no significant disruptions to supply, participants said on Thursday.
Broker Global Coal’s benchmark Newcastle [Australia] index was last assessed down by around 2% from a week ago, at USD 100.76/t.
On the futures market, the Cal 20 Ice Newcastle contract was also 2% lower on the week, closing on Wednesday at USD 92/t.
“Industrial activity is weak, but the recent cold spell [in China] increases volatility,” said a Chinese coal trader, adding however generators appeared to be “well supplied”.
Northeast China experienced extremely cold weather conditions last month, with Beijing enduring near record low temperatures for the time of year. But it has since become milder.
“It’s hard to predict whether they will need to restock before Chinese New Year [in early February],” the trader said.
Elsewhere, inventories at 124 Indian coal-fired plants, monitored by the country’s Central Electricity Authority, were assessed 5% higher on the week at 16.7m tonnes – the highest since mid-May last year.
But this was due more to lower generation demand, than any significant step-up in imports or domestic production, said an India-based coal trader.
“Domestic production is running tight in India,” he said.
On the supply side, strike action by workers at Australia’s largest rail freight company, Aurizon – which restricted shipments on key Queensland coal routes late last month – had ended, for the time being at least.
Rail, Tram and Bus Union executive officer, Stewart Prins, warned that there could be some further action.
“The unions are not taking any industrial action at present, but there hasn’t been any progress with negotiations with Aurizon either,” he said.
“Workers are currently discussing the next steps in the campaign, so we should be able to provide an update early next week.”