Market watchers say the contract should trigger further thermal coal sales into the semi-soft coking market.

ANZ analysts said yesterday coal prices could rise on a higher oil price, backed by strong fundamental conditions.

While coal prices fell for the first time in 12 weeks, ANZ said the 3.5% fall in Newcastle spot prices could be attributed to profit taking rather than a change in mood.

It said the Beijing Olympic Games should have a positive flow-on effect to prices as coal deliveries to domestic power plants pick up and further tighten supply in Asia.

ANZ analysts predicted prices over the coming months may ease mildly but a high floor on prices would remain.