Regional Coal: Japanese power companies expect lower coal price
Thursday, January 19 2006 - 02:27 AM WIB
Rising supplies from Australia and Indonesia, as output and export bottlenecks ease, will put pressure on prices this year after two years of steep gains, the officials said. Most coal contracts follow the Japanese fiscal year, running April to March.
Kansai Electric Power, Japan?s second-largest utility, set the tone for this year?s talks by paying US$41 a ton for 200,000 tons of Australian Bulga coal for the October-December period, several Japanese industry officials said.
The price, which emerged recently, was significantly lower than the up to $54 a ton paid by most Japanese utilities for the current business year to March.
It would be used as a reference point for upcoming annual discussion for supplies from Australia and Indonesia, the main Asian exporters.
?Kansai look to have got a very good deal,? said Graham Wailes, coal analyst at AME Mineral Economics in Sydney. ?I?d imagine we?ll see a range of $41-$43.?
Coal ? which had lost favour since the late 1990s as many nations turned to cleaner fuels such as natural gas in a crackdown on carbon emissions ? has seen renewed enthusiasm as gas prices have surged and green-coal technology offers the promise of cleaner-burning fuel.
Thermal coal prices jumped in 2004 and rose again last year as demand was strained, top producer China began importing coal for steel mills and producers adopted a tougher negotiating stance, analysts have said.
The biggest 10 utilities in Japan, the world?s fourth-largest coal consumer but its top importer, burned 51-million tons of it last year, data showed.
Australia supplies about 60 percent of Japan?s coal while 20 percent was from Indonesia, whose total exports were forecast to soar nearly 25 percent this year to 114-million tons, energy officials said.
The price cut would affect earnings for exporters such as BHP Billiton. (*)