The predicted price rise could result from Japanese nuclear plant shutdowns and economic growth.

Bloomberg said spot prices for thermal coal shipped by Rio Tinto and Xstrata from Newcastle port may rise to $27.20/ton in 2004, compared to an average of $24.30/ton in the nine months ended September 12.

“Japan’s demand has been very strong, largely because of the problems they have had with their nuclear power stations. My read on that is it is likely to be an ongoing issue for them,” Citigroup Inc.’s Smith Barney Sydney division director of commodity analysis Alan Heap told Bloomberg.

The Australian Bureau of Agriculture and Resource Economics said in the first half of 2003, higher Japanese coal import demand was supported by higher capacity utilisation at coal fired electricity generation plants following the temporary closure of nuclear power capacity.

For the whole of 2003, Japanese imports are forecast to total 101 million tonnes, an increase of 10% from 2002.

"Despite the expected phased return of nuclear power generation in the latter half of 2003, Japanese coal imports are forecast to continue to grow in 2004 because of the commissioning of TEPCO's 1000 megawatt coal fires Hitachanaki power station," said ABARE.