“Reports of reasonable coal import demand in south China would back this view,” ANZ head of commodity research Mark Pervan said in his latest weekly analysis.

“However, trading activity elsewhere has been subdued, with a seasonal

slowdown (northern hemisphere spring) dovetailed with the global recession

winding back demand.”

Pervan noted that many coal customers still have to conclude 2009 term prices and that other reports continued to suggest ample customer coal stock levels in Asia and Europe.

“Freight rates have swung back downwards – the key Baltic Panamax index off 6.3 per cent last week, with all of the declines situated in the Asia/Pacific market.

“A 40 per cent drop in tonnes of coal due for loading off the port of Newcastle last week is also a red flag for lower coal demand near term.”