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Thermal coal-European prices near 12-year low, Chinese imports dip further

European thermal coal prices remained near a 12-year low on Wednesday, as a weaker growth outlook for top buyer China, along with its falling imports, continued to weigh on the market.

China's August coal imports fell 18 percent from levels seen a year ago and year to date imports are down over 31 percent.

"Prices have gone to a level that a lot of Indonesian producers are not producing the coal, so I think total trade flows will fall substantially this year," said a trader.

"China will import 75 million tonnes less than they did last year."

European API2 2015 coal futures were down 0.35 cents or 0.7 percent at $50.90 a tonne, after hitting a 12-year low of $50.65 earlier this week.

European cargoes for nearby delivery into Amsterdam, Rotterdam or Antwerp (ARA) last closed at $53.15 a tonne, having fallen by around 15 percent during the past six months.

Chinese coal imports have already fallen sharply in 2015, due to the government's concerns over the environmental impact of coal power generation and its desire to help financially distressed domestic coal producers.

In South Africa, prompt cargoes from the Richards Bay terminal last closed at $52.00 a tonne, down around 7 percent over the past month on weak Indian import demand.

Earlier this week top thermal coal exporter Glencore announced measures to rein in debt including reducing its working capital by $1.5 billion by the end of next June.

Traders said they did not expect this would mean a sudden change to their coal activities as they have already been active sellers on the spot market.

"In terms of working capital requirements, I would suggest that coal is not one of the heaviest burdens they carry," a coal trader said.

"They have had issues with high coal stocks in Australia and South Africa but not to the extent that it's a big drag on its balance sheet. If they wanted to reduce capital across their trading business I would say refined metal and oil are where they'd do it."

source: http://af.reuters.com