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Japan imports less coal in January, but consumption up

14 Feb 2013 15:42:13 | csd

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The 10 major Japanese power companies bought 4.1m tonnes of coal in January, down from 5.3m tonnes last year and 4.3m in December, data from the Federation of Electric Power Companies (FEPC) of Japan shows.

But consumption of coal was up month on month, with power generators burning 5m tonnes in January compared with 4.6m tonnes in December.

Despite Japan decreasing the amount of coal it imported month on month, the ICIS January '13 index outturned at $92.743 which was up from $90.668/tonne for the December index.

Prices in early February at FOB Newcastle swaps and physical hub were boosted by railway workers for freight company Pacific National in New South Wales striking for two days and floods in Queensland, which saw mining giants BHP Billiton and Xstrata declare force majeure on some cargoes leaving the port of Gladstone.

The strong activity at the physical hub in early February faded this week as the Chinese Lunar New Year muted demand, with just one index-linked deal for a FOB Newcastle April-loading physical cargo reported to ICIS so far.

Japanese power utilities' negotiations with Australian coal producers for supply of coal in the fiscal year starting with April are looming. With the long-term contract usually priced a few dollars above FOB Newcastle prices, some sources think the settlement could be above $100/tonne.

Others, however, said that with low demand from Asia and an abundance of coal worldwide with US producers now offering into the Asian market, Newcastle producers might struggle to achieve above that level.

Total electricity generated and purchased was down 1.7% to stand at just under 86TWh. FEPC said the reduction was driven by companies and other customers making efforts to reduce consumption.

However, the decreased amount of power generated from nuclear led to a 54% year-on-year increase in thermal power generation to 63TWh. Imported and consumed LNG has remained steady month on month. Fionn O'Raghallaigh

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