Australian Coal Prices Edge Lower on Weak Demand

Australian thermal coal prices edged lower on Monday due to weak demand from China and oversupply in the global coal market.

Cargoes for delivery in December from Australia's Newcastle terminal fell 45 cents to $63.00 a tonne on Monday afternoon. Cargos for delivery in January fell 50 cents to $63.50 a tonne.

"There isn't much demand around for coal, but there is still plenty of supply, so I would expect prices to continue to drift lower," a coal trader said.

Australian thermal coal prices are hovering around five-year lows largely due to a slump in demand from China, where consumption has been hit by a combination of slower economic growth and Beijing's fight against pollution.

Analysts have warned that supply is likely to remain high, because mining is still profitable for Australian producers even at current low coal prices.

Meanwhile physical trades were scant in Europe's coal market.

Cargoes for delivery in December to Amsterdam, Rotterdam and Antwerp (ARA) had a bid/offer spread of $72-73.15 a tonne but had not yet changed hands by 1700 GMT on the GLOBALcoal platform. The contract settled at $73.15 a tonne on Friday.

The January 2015 contract had a bid/offer spread of $71.55-72.50 per tonne compared with a settlement price on Friday of $72.10 per tonne.

Demand for coal is weak in Europe, because most utilities are well stocked after last year's mild winter and warm summer.

(Reporting by Susanna Twidale; editing by Jane Baird)