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 nine-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. Exports of the fuel jumped 35 percent in the week ended 7 a.m. local time today, Newcastle Port Corp. said on its Web site.

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 the mining companies that ship coal through Newcastle.

The index traded below this year's contract price of $125 a ton for a second week and has lost 43 percent from a July 4 record. The monthly index fell 10 percent to $144.82 a ton in September from $160.90 the previous month.

Goldman Sachs JBWere Pty last week cut its forecast for 2009 contract prices for thermal coal on declines in crude oil. It now forecasts the price will remain at $125 a ton, down from an earlier estimate of $150 a ton.

Shipments from the port, the world's biggest export harbor for the fuel, rose to 1.9 million tons from 1.4 million tons a week earlier. A total of 24 ships, waiting to load 2.1 million tons of coal, were lined up outside the port, down from 26 last week.

Coal ships waited 8.6 days to load coal, down from 9.3 days a week earlier, Newcastle Port said. The waiting time compared with 0.4 day for general cargo vessels last week, it said.

A total of 20 vessels carrying coal left Newcastle in the week ended Oct. 11, Newcastle Port said today in an e-mailed report. Nine ships were bound for Japan, five for Taiwan, three for South Korea, two for Malaysia and one for China, it said.

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