Newcastle Coal Drops Below $100 a Ton, First Time in 9 Months

By Jesse Riseborough

Oct. 27 (Bloomberg) -- Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, fell below $100 a ton for the first time in nine months as a slump in oil prices and freight rates curbs demand for the fuel.

The weekly index for power-station coal prices at the New South Wales port dropped $8.70, or 8.3 percent, to $96 a metric ton in the week ended Oct. 24, according to the globalCOAL NEWC Index. The index last fell below $100 a ton in the week ended Jan. 25 at $93.35 a ton.

Crude oil prices declined for a fourth week last week, diving 11 percent, as the financial market crisis spreads, job cuts increase and fuel consumption slows. The Baltic Dry Index, a measure of shipping costs for commodities, fell for a 15th consecutive trading session in London on Oct. 24, indicating a slump in demand.

Newcastle coal traded below the $125 a ton contract price for a fourth week and is 51 percent off a record $194.79 set for the week ended July 4. The monthly index fell 10 percent to $144.82 a ton in September from $160.90 the previous month.

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