“Prices over the coming months should ease, in line with our lower forecast oil price,” ANZ said in its Commodity Weekly report released Tuesday.

“Global demand conditions also appear to be faltering – more so in Europe than in Asia. However, ongoing infrastructure constraints in Australia, the likelihood of lower exports out of China (potentially Vietnam and South Africa) and seasonally wet weather in Indonesia is likely to slow the price decline.

“The switching of higher quality thermal coal into the higher priced semi-soft coal market should continue with price differentials widening further.”

Newcastle prices fell 8.8% while prices fell 18.3% out of Chinese port Qinhuangdao.

Russian and South African export prices also fell and there has been rumour that Russian coking coal producers have requested government handouts.

In a survey conducted and published by Bloomberg, BHP Billiton and Rio Tinto have estimated they will need to cut coking coal contract prices by up to 33%.

Predicted contract prices averaged $200 per tonne starting in the 2009 Japanese financial year.

Canadian producer Teck Cominco, which purchased Fording Canadian Coal Trust in October last year, said in a presentation at the Macquarie Global Base Metals Outlook Conference this week that analysts’ 2009 price forecasts had “declined significantly” over the past few weeks.

The current consensus forecast is for $160 per tonne versus the mid-$200 per tonne range just one month ago, the producer said.

Coal makes up 23% of Teck Cominco’s revenue.