LONDON, Oct 8 (Reuters) - Thermal coal prices hovered just above five-year lows on Wednesday as a global supply glut and weak demand from leading consumer China weighed.
European API2 2015 coal futures prices were trading at $73.45 a tonne on Wednesday afternoon, down $0.25 since their last close.
Chinese coal demand has fallen in 2014 with the latest data showing August coal imports fell 27.3 percent from the same period a year ago.
“What is hurting Chinese coal imports is all about weak internal demand, plus domestic coal is very cheap at the moment compared with international coal,” said Georgi Slavov, head of Marex Spectron’s basic resources research.
“Many of the utilities in China are simply not incentivised to import coal.”
Elsewhere, the world’s third largest coal importer India, has seen a sharp rise in shipments which could be set to continue, although analysts were doubtful this alone could prevent further price falls in the global market.
India’s annual coal imports could jump by as much as a third to more than 200 million tonnes for the next few years as a result of a court ruling last month that will halt coal mining by most private companies from next year.
“India is the only bright spot on the coal market but it’s not enough to offset any global oversupply,” Slavov said. (Reporting by Sarah McFarlane; editing by David Clarke)