* Prices hover at 10-mth high, seen climbing higher
* Port stocks fall for third week
* Overseas coal prices climb above $100/T on tight supplies,
By Fayen Wong
SHANGHAI, Nov 5 (Reuters) - China’s thermal coal prices at Qinhuangdao port, a domestic benchmark, clung to recent gains and lingered at a 10-month high, as fast-dropping temperatures lifted demand and helped draw down port stocks.
Prices could strike above 900 yuan ($135.1) a tonne by the end of the year due to seasonal storage and the possibility of colder-than-usual winter, traders and analysts said.
Chinese coal prices are already trading close to the high above 850 yuan ($127.6) posted in January this year, when prices rose steeply as China’s worst snowstorm in 50 years cut supplies and pushed demand sharply higher.
“This is only the start of winter and prices are already at 840 yuan. There is a lot more room for prices to climb over the next two months as the colder months approach,” said a coal trader in Hangzhou, whose firm produces and trades around five million tonnes of coal per year.
Coal with calorific value of 6,000 kcal/kg (NAR) was quoted in the range of 840 yuan to 850 yuan ($126.10-$127.60) per tonne in the week to Nov. 5, up 27 percent from a year ago.
Coal with a heating value of 5,000 kcal/kg gained at least 10 yuan to 625-635 yuan, according to the Qinhuangdao Seaborne Coal Market.
Stockpiles at Qinhuangdao fell for the third week to 6.8 million tonnes, data from the China Coal Transport and Distribution Association showed.
Chinese prices have spiked over 10 percent since September, amid growing speculation that China may again experience severely low winter temperatures, prompting traders and power stations to start stockpiling the fuel.
“Coal prices will continue the upward momentum and are likely to rise as much as 10 percent by the end of this year,” said industry analyst Song Zhichen from China Investment Consulting.
Coal prices are up around four percent so far this year.
Expectations that a winter price rally have encouraged some Chinese buyers to scout for overseas bargains, particularly from South Africa, as supplies from nearby Australia and Indonesia have been constrained by rain.
But high freight rates and strong international prices mean limited spot deals could be completed, overseas traders said, as many Chinese buyers were offering unattractive prices.
The general perception of tight supply in all coal exporting countries has continued to support prices across Australia to South Africa as has the expectation that any new European buying for the fourth quarter will push prices still higher.
Australia’s thermal coal prices, a benchmark for Asia, rose over $1 a tonne during the last week to climb above $100 a tonne, as continuing concern about wet weather in both Indonesia and Australia as well as Chinese buying interest boosted prices. [ID:nSGE69D0D7] Weekly Qinhuangdao prices for (Yuan) PORT STOCKS
>6,000 kcal/kg >5,000 Kcal/KG (Mln Tonnes) WEEK TO
840-850 690-700 6.805 Nov 02
825-835 675-685 7.066 Oct 31
760-770 640-650 7.289 Oct 25
775-765 625-635 6.387 Oct 18
775-765 615-625 6.377 Oct 11
755-765 615-625 7.057 Sept 27
755-765 615-625 N.A Sept 20
755-765 610-620 7.431 Sept 13
760-770 615-625 7.425 Sept 06
760-770 615-625 7.187 Aug 30
765-775 620-630 7.084 Aug 23
770-780 625-635 7.289 Aug 16
770-780 625-635 7.220 Aug 09
780-790 635-645 7.020 Aug 02
780-790 640-650 5.899 Jul 26
780-790 650-660 5.944 Jul 19
780-790 650-660 5.765 Jul 12
780-790 650-660 5.940 Jul 05 ($1=6.667 Yuan) (Editing by Ken Wills)