Coal prices may rise to $90/ton in 4Q 2009 on
growing demand from China, India, according to UBS analysts in investor note.
"We expect China 'arbitrage buying' to return as seaborne thermal coal
prices drift lower. China can stabilize and lift seaborne prices in these
conditions."
India's coal imports from South Africa also sign of strong
demand, say analysts. "The commissioning of new power capacity amid poor
quality local coal resources could provide strong upside for Indian coal
demand." But weak demand from Europe, Japan may weigh on prices - along
with higher exports from Indonesia adding to regional supply, according to
note.