Australia Newcastle Coal Price Drops 6.2% as Energy Prices Fall

By Jesse Riseborough

Nov. 17 (Bloomberg) -- Power station coal prices at Australia's Newcastle port, a benchmark for Asia, fell 6.2 percent amid declines in global energy prices.

The weekly index for power-station coal prices at the New South Wales state port dropped $6.50 to $97.52 a metric ton in the week ended Nov. 14, according to the globalCOAL NEWC Index. The index has traded below the current $125 a ton contract price for the past seven weeks.

Macquarie Group Ltd. cut its forecast for 2009 contract prices for the fuel by 38 percent, predicting prices will drop to $105 a ton as global supplies increase. Crude oil slumped to its lowest in almost two years last week as slowing economies cut energy demand and cause larger stockpiles.

Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle.

The weekly globalCOAL index has halved from a record $194.79 on July 4. The monthly index fell 26 percent to $106.92 a ton in October, from $144.82 the previous month.

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