China Coal-Prices climb, sentiment bullish ahead of summer - Reuters

China's thermal coal prices rose to a three-month high of 790 yuan ($120.92) per tonne this week, while port stocks fell for a sixth-straight session as power plants boost inventories ahead of summer.This is buoying traders' hopes that the appetite for imports would rebound significantly.Coal with a heating value of 5,500 kcal/kg ticked up to 780-790 yuan a tonne on Thursday -- the highest since the week of Jan. 17, while 6,000 kcal/kg NAR coal rose for a third week to 845 yuan, reported industry portal sxcoal.com.The top coal port Qinhuangdao posted its 6th straight week of declines, with stocks falling 7 percent to 6.4 million tonnes.

They have dropped more than 2 million tonnes or 25 percent from a high of 8.47 million tonnes in early March."Sentiment on domestic coal prices has changed and the market has turned a lot more bullish. Most are of the view that there is quite a lot of room for prices to move higher," said a Beijing-based trader.Chinese steam coal prices rose more than 8 percent from April to end-May last year."Stocks at some utilities have fallen quite strongly and many are replenishing their inventories, which explains the steady decline in port stocks," the trader added.Some power plants in the southern coastal provinces such as Guangdong and Fujian have also started to book imports for delivery starting as early as May from Indonesia to take advantage of the price arbitrage."I'm sure we will be seeing quite strong import numbers in the coming months," said a second trader.After a near three-month lull in import demand, overseas producers and traders would welcome gains in Chinese prices with much relief, as a recent pullback in Japanese demand after the March 11 quake has led to ample spot supplies and casting a pall on prices.

CHINA DEMAND LIMITED TO INDONESIA COAL
Most of China's coal demand is limited to Indonesia's sub-bituminous material, whereby imports could be cheaper than domestic supplies by between $2 and $4 a tonne on a landed basis, traders and producers said. Indonesia's sub-bituminous coal prices have been on a downtrend on expectations of increased output on the back of a returning dry season as well as the imminent retreat of Indian buyers ahead of the monsoon season.A growing number of smaller Indonesian miners have since begun to reduce their price offers to secure summer deals with Chinese buyers, as they considered how Japanese demand may take longer than expected to rebound.Supplies from Australia, South Africa and Colombia are still uncompetitive compared with domestic supplies at current price levels.Australia's thermal coal prices stood at $123.86 a tonne FOB this week, supported by a higher settlement for the annual Japanese thermal coal contract, while South African FOB Richards Bay coal prices were at $124.