Export prices for power-station coal at Newcastle, Australia, the world's largest-export terminal, fell to a nine-week low as holidays in China and Japan slowed demand.

The price of thermal coal for immediate delivery from the port in New South Wales state fell $2.37 to $52.22 a metric ton in the week ended May 4 from a week ago, according to the globalCOAL NEWC Index. The Baltic Panamax Index rose to its highest in more than 2 years after the queue of ships waiting to load at Newcastle Port lengthened.

``I'm surprised by that weakness,'' said Andrew Harrington, a commodities analyst at Australia & New Zealand Banking Group Ltd. in Sydney. ``We have seen very strong demand especially with the switch in China from a net exporter to a net importer in March, indicating to me the thermal market is still strong.''

Rio Tinto, BHP Billiton Ltd. and Xstrata Plc are trying to increase shipments after China raised imports and cut exports. Bottlenecks at the port and on the rail system in New South Wales are preventing miners from fulfilling orders, raising their costs. Port Waratah Coal Services Ltd., operator of the coal terminals at Newcastle, said all coal shippers using the port will have their capacity allocations cut this year due to high demand.

China, the world's second-largest energy user, increased coal imports 53 percent to 5.67 million metric tons in March. The nation's coal exports fell 36 percent to 3.71 million tons in the same month, the Beijing-based Customs General Administration said April 23. China is the world's biggest coal producer and consumer.

The Newcastle price has increased from last year's low of $41.10 in the second week of November. In February prices rose to $55.79.

Holidays

Buyers in Japan and China, Asia's biggest importers, were away for public holidays last week. Chinese businesses and markets were closed last week and today for the annual labor holiday. Japan observed holidays May 3 and May 4.

The queue of ships waiting to load rose by three to 70 for the week ended early today, the Newcastle Port Corp. said on its Web site. The queue of vessels had fallen to 67 last week, the lowest in three weeks. The average waiting time to load coal was 25.7 days compared with 0.2 days for general cargoes.

``Anything above $50 is still relatively strong in my view,'' said Harrington. ``Perhaps the slight improvement in the vessel queue is seen as something that may indicate less demand, although that's hard to imagine.''

The Baltic Panamax Index rose 2 percent for the week ended May 4 to 5,942, the highest since December 2004. The index measures the cost of hiring Panamax ships, the class of vessel that carries most of Newcastle's coal exports.

Shipping Costs

The average daily hire rate for a Panamax vessel, which typically carries about 75,000 tons, has risen 38 percent this year, extending its gains for a second year. The rate advanced to $47,981 on May 4, the highest since Dec. 6, 2004, according to data from the London-based Baltic Exchange.

Twenty ships carrying coal left Newcastle in the week ended May 5, one more than the week earlier, Newcastle Port said today in a statement. Fourteen vessels headed to Japan, two to Korea, two to Mexico and one to the Netherlands and Egypt, it said.

A 20 percent production cut by Coal & Allied Industries Ltd., an Australian thermal coal producer controlled by Rio Tinto Group, may be made up by Indonesian producers.

Australia may have exports of the fuel crimped for two years because of port constraints, Preston Chiaro, head of the energy unit at Rio Tinto, the nation's largest thermal coal exporter, said in an April 27 interview.

Straits Asia Resources Ltd., a Singapore-listed coal producer with mines in Indonesia plans to expand coal production by 50 percent to 6 million tons annual in the first quarter of 2008. Japan is Straits Asia Resources' biggest customers.