December 02, 2008

Newcastle coal prices fall as China increased exports in September

Power station coal prices at Australia’s Newcastle, the world’s biggest export harbor for the fuel, fell from a record after China exported more than it imported in September.

According to the globalCOAL NEWC Index Coal for immediate delivery at Newcastle declined by 0.2% to USD 75.99 per tonnes in the week ended October 19th 2007. Prices reached an all time high of USD 76.16 in the week ended October 12th 2007.

Mr Rory Simington a senior coal analyst at AME Mineral Economics said “China usually exports more in the second half than in the first half and we have actually seen a little bit of a recovery from China and that may point to some relief. He said international coal prices have risen relative to China`s domestic prices, prompting coal companies in the country to increase their exports instead of selling the commodity domestically. He added that China’s increasing coal-fired power generation, which rose 18% in the first half, may drive coal consumption higher and limit the amount of fuel for sale overseas.

According to China’s, customs data released on October 17th 2007, China coal producer and consumer exported 4.47 million tonnes of coal in September 2007 and imported 3.62 million tonnes. China became a net importer of coal for the first time in January and its exports also exceeded imports in February, July and August 2007.