Asian coal prices hit late 2016 high amid huge shipping congestion | Reuters
SINGAPORE (Reuters) - Asian benchmark thermal coal prices have pushed to their highest levels since 2016, fuelled by demand in China and loading delays in Indonesia that have ramped up shipping congestion outside major coal ports.
Spot cargo prices for Australian Newcastle coal have risen nearly 15 percent from lows in late November after China loosened import restrictions to help meet a winter fuel shortage.
"The reason behind relaxing the restrictions was to ensure coal supplies at utilities, as some coal-fired power plants in eastern regions have been operating with minimum coal inventories," said Zhang Xiaojin, coal analyst at Everbright Futures.
The move by the National Energy Administration also followed an ambitious gasification programme that moved too many households and factories from coal to gas for its utilities to keep up.
Traders said strong orders from India have also supported prices, which hit $105.65 per tonne on Wednesday, the highest since November 2016.
"India is buying throughout Q1, which means the shortage is not expected to end any time soon," said a coal trader with a major trading house, who declined to be named.
Bottlenecks at import terminals across China and delays at loading ports in Indonesia's Kalimantan island, one of the world's bigggest thermal coal mining regions have added to the tighter market.
"The trouble to load in Kalimantan is a result of huge rainfalls. This has triggered replacement orders for supplies from Newcas....