Japanese utilities are turning to Chinese miners for additional thermal coal supplies after Tokyo Electric Power Co. 9501.T (TEPCO) sought help from six utilities to help fill an anticipated shortage from the shutdown of its quake-hit nuclear plant, industry sources said on Friday.

They said Japanese utilities such as Chubu Electric 9502.T and Tohuku Electric Power Co. 9506.T, would be in Beijing next week to seek more coal supplies from miners such as Shenhua Energy 1088.HK and China Coal Energy 1898.HK.

“China is their only option at the moment because Australia is unable to deliver prompt cargoes and Indonesia hardly has any spot tonnages left,” said a trader who declined to be named.

Coal shipments free-on-board (FOB) China’s largest coal port Qinhuangdao take only about five days to reach Japan, compared with a minimum of 30 days for Australian coal.

It is not clear how much coal Japanese utilities would be seeking to secure from Chinese producers but industry sources said the unexpected move from Japanese utilities to seek more Chinese coal would put Korean utilities at a disadvantage.

Chinese miners and South Korean buyers have not yet settled the 2007 term prices. The talks had hit a snag, with the miners turning down South Korea’s request for shipping the remaining 70 percent of contracted volume for 2006.

“The Koreans will start getting worried since there is now competition from the Japanese for coal,” said a trading source.

PRICE IMPACT

Industry sources said TEPCO’s nuclear fiasco has had limited impact on immediate coal demand and Newcastle spot prices as most Japanese utilities were already running their coal-fired base-load power plants at full capacity during summer demand.

Any additional electricity generation would, therefore, have to come from crude or gas-fired peak-load power plants.

Benchmark Australian spot thermal coal prices stood at $66.24 on Friday, compared with $66.87 a week earlier, according to globalCOAL’s NEWC index.

Traders said spot prices could rise in the coming weeks as uncertainty over how long Tepco’s plant would shut had prompted Japanese utilities to look for additional spot supplies in anticipation of a possible supply crunch in autumn and winter.

Russian and Indonesian exporters and suppliers said they had received more enquiries for prompt coal very recently from Japanese and Korean utilities.

“The Japanese gencos have all been asking us for coal, much more so recently, but we can’t help them, we’re fully sold,” one major Russian exporter said.

TEPCO’s nuclear power plant, the world’s largest, remains closed after a strong tremor on Monday caused radiation leaks among other problems.

TEPCO has asked six other utilities to help supply power from about late July to the end of September, although it has not specified how much it requires.