The globalCOAL NEWC index gained 2.37%, closing at $US78.04 per tonne for the week ending Friday.

South African spot thermal coal prices did not fare well, with both indexes losing ground.

Richards Bay spot prices sank 5.32% for the week to $60.67/t while the globalCOAL DES ARA index, considered to be South African spot thermal coal prices plus freight, dropped 3.93% to $67.23/t.

In a commodities report, Macquarie said China imported 33.5 million tonnes of thermal coal for the first half of this year, including 12Mt of bituminous coal, 15.5Mt of anthracite and 6Mt of “other coal”, presumably Indonesian sub-bituminous coal.

Compared to China’s total thermal coal imports of 34Mt last year, Macquarie said the country’s imports of 10.8Mt in June alone had set a new monthly record and represented a rate of 132Mt per annum.

Macquarie analysts are cautious on the remaining strength of thermal coal through the current quarter due to the unprecedented levels of demand.

“The sustainability of China’s thermal coal import demand is questionable over the balance of this year,” Macquarie said.

“Domestic prices are now more competitive than seaborne prices as domestic mine supply has improved, while international prices and freight rates have rallied.

“The arbitrage opportunity into China has closed, challenging new deals for thermal coal imports, particularly for imports of higher-quality bituminous coal.

“Indeed, there have been numerous reports in recent weeks of deferrals and cancellations of Chinese thermal coal shipments.”

While the analysts view China’s import outlook as the key to thermal coal prices, they do not anticipate seaborne thermal coal prices will have significant downside from current levels, nor do they expect demand to collapse as swiftly as it has grown.

China has significantly lifted coal imports this year, but this has been more notable for coking coal as a new safety regime has cut production from the country’s small mines sector.