Asia Coal-Prices falls below $130 on demand concerns

Tag : power Supplies

SYDNEY, Sept 29 (Reuters) - Coal prices for power generators inAustralia, a benchmark for Asia, fell to a 5- month low of about$129 a tonne in the latest week, amid worries of slowing demand inEurope and China.
Reports of growing coal stockpiles at Chinese ports and powerstations as well as sharp falls in freight rates more than offsetnews of supplies disruptions.
Thermal coal prices fell $8.32 from a week earlier to $137.30 atonne, the globalCOAL's NEWC weekly index showed in the week endedSept. 27, based on prices at Australia's Newcastle port, theworld's largest coal export terminal.
'The market is focusing on the bearish news at the moment, such asevidence of slowing demand in China with rising coal stockpiles atports and power plants,' said Mark Pervan, a senior resourceanalyst at Australia and New Zealand (ANZ) bank in Melbourne.
'What has also dragged coal prices down further is the slump infreight rates, which are a pretty good indication of demand in thenext three to six months.'
Coal is also piling up in China's top shipping port for the fuel,as manufacturing weakness and slackening power demand undermine amarket that was badly overstretched this summer.
Coal supplies at Qinhuangdao had reached 8.44 million tonnes bySept. 16, at least 3 million tonnes above normal levels, accordingto a report by Xinhua news agency.
Some traders said signs of easing domestic demand and growingstockpiles in China could also result in Beijing issuing ahigher-than-expected quota for the second-batch of export licenses.
While there has been no shortage of bullish news for the coalmarket in recent weeks, prices have fallen for four consecutiveweeks on concerns of slackening demand.
Baltic Exchange's chief sea freight index for global raw materialstrade fell to a 20-month low last week, weighed down by troubledfinancial markets, weaker commodity prices and concerns over Asiandemand.
(Editing by Ben Tan)
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