Japan’s 23.7% increase in steam coal imports for the quarter was the result of re-stocking, and almost half went into utility coal inventories. Coal consumption by the utilities was up only 2.4% in the June half year.

Energy Economics said the fatal accident at Kansai Electric’s 826 MW Mihama No.3 nuclear unit in August had plunged Japan’s nuclear industry back into crisis, just as its nuclear output was nearing complete recovery after the Tokyo Electric safety cover-up scandal.

“The Mihama accident may, nevertheless, arrest the slide in spot steam coal prices for the next couple of months,” said Energy Economics director, Clyde Henderson.

Re-stocking also played a large part in the growth in Korean, Taiwanese and United Kingdom steam coal imports over the first half.

Metallurgical coal imports by the ‘top four’ increased by 1% in the June quarter but were still down by 1.6% over the first half as a whole. Australia metallurgical coal exports amounted to 29.63Mt in the June quarter.

Henderson said steam coal spot prices continue to fall, with the Newcastle spot price down to US$55.30/t FOB in mid August and to US$54.75/t by the end of the month. The company’s forecasts for Japanese contract prices for the Japanese fiscal year 2005 are US$74.00/t FOB for hard coking coal, US$54.60/t FOB for semi-soft and US$50.00/t FOB for steam coal.

“Perhaps the most interesting issue over the forthcoming annual coking coal contract negotiations will be how much tonnage Xstrata secures into Japan, with the Japanese steel mills expected to exact retribution this year for Xstrata’s hard nosed pricing strategy, that is if they are able secure additional tonnage from other producers,” Henderson said.