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Coal Glows, Bonds Rise: Market Bits


NEW YORK ( TheStreet) -- Coal prices have been climbing, according to ANZ Global Markets Commodity Research analyst Natalie Robertson.

Xstrata and Chugoku Electric have settled on an annual coal contract for the Japanese fiscal year starting April 1, at a record level between $129.5 to $129.85 a ton. That's below some market expectations of $140 a ton, but consistent with ANZ's forecasts.

The contract is 32% higher than the previous year's prices, and exceeds the 2008 record of $125 a ton, according to the analyst. The price is also $10 above current Australian spot prices of about $120 a ton, according to Robertson. Negotiations between Xstrata and Japanese utilities providers were delayed after the earthquake in Japan, the analyst said.

Meanwhile, Queensland's coal production has fallen 30 million tons, or 15% of annual production due to summer flooding, the Queensland Resources Council reported, and a derailment in South Africa's Transnet rail line to Richards Bay Coal Terminal has lost around 500 kilotons (kt) of export coal, according to initial market predictions, Robertson says.

The analyst notes that state-owned Indian Railways has levied a busy season charge of 5% for coal and coke transport and that China is expected to raise power prices this year due to rising coal costs.

Coal stocks were trading mixed Monday afternoon.

Massey Energy (MEE) was rising 1% to $69.95, Westmoreland Coal (WLB - Get Report) was gaining 2% to $15.26 and International Coal (ICO) was falling 2.1% to $11.15.

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