Australia's Newcastle Coal Price Extends Slump to 9-Month Low

By Jesse Riseborough

Oct. 13 (Bloomberg) -- Power station coal prices at Australia's Newcastle port, a benchmark for Asia, declined for an eighth week, slumping to a 9-month low as a global credit freeze weakened demand for commodities.

The weekly index for power-station coal prices at the New South Wales port dropped $9.27, or 7.7 percent, to $111.90 a metric ton in the week ended Oct. 10, according to the globalCOAL NEWC Index. The index has lost 43 percent from a July 4 record.

The Reuters/Jefferies CRB Index of 19 commodities has fallen 16 percent this month on concern the worst credit squeeze since the Great Depression will curb demand for raw materials. Xstrata Plc, the world's largest exporter of energy coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle.

The index traded below this year's contract price of $125 a ton for a second week. Goldman Sachs JBWere Pty last week cut its forecast for 2009 contracts prices for thermal coal on declines in crude oil. It is now forecasting the price to remain at $125 a ton, down from an earlier estimate of $150 a ton.

Exports from the port, the world's biggest export harbor for the fuel, fell 21 percent last week to the lowest in almost four months.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net