By mid-July prices had eased to $US51.80 per ton FOB Newcastle before falling fairly sharply to $US49.40/t at the end of the month.
Japanese temperatures were significantly below average in May keeping demand for air conditioning fairly close to normal this summer, Henderson said.
Temperatures, though, were anomalously high in Western Europe in June, Henderson said, prompting French utility EDF to encourage customers to reduce energy consumption. The high temperatures contributed to a rise in Richards Bay spot prices, which peaked at $US53.3/t in mid-July before falling to around $US50.00/t at the end of July.
Ocean freight rates continue to fall, with Richards Bay to Rotterdam Capesize rates falling to $US9/t, compared with the peak of $US29.30/t in late-November 2004. One hundred and twenty new Capesize vessels are expected into the market over the next 18 months.
The Steel Authority of India (SAIL) has been seeking bids for one million tons of hard coking coal and 50,000t of soft coking coal.
“SAIL has still not settled contract prices for this year with Xstrata, and may be applying pressure by building up its coking coal purchase commitments with non-Xstrata suppliers,” Henderson said.
SAIL’s hard coking coal tender closes today for delivery September 2005 to June 2006.
