In a commodities report, ANZ said sticky China domestic coal prices were implying a floor on lower international free-on-board prices, as revealed by the trade at the country’s largest coal shipping port.

“Qinhuangdao coal prices have held up around $85 per tonne for the past three months, suggesting much lower prices are unsustainable for local suppliers and would prompt a flood of imports,” ANZ said.

“Encouragingly, China imports are still strong. August trade numbers show the third-highest level of coal imports into China at 11.7 million tonnes, down 15 per cent from 13.9 million tonnes in July but up three-fold from 3.8 million tonnes in August 2008.”

Recent delays to the Hunter Coal Export Agreement have hit the normal operation of Newcastle’s port.

ANZ noted that vessels off Newcastle had almost halved from 40 to 26, and coal loaded had slumped from 3.59Mt to 2.25Mt.

But now the export agreement has the consent of all Hunter Valley coal producers, a request has been lodged with the Australian Competition and Consumer Commission to reinstate short-term export arrangements at Newcastle.

The new agreement, if approved by the ACCC, is expected to kick off at the start of 2010.