Banpu Pcl, Thailand's biggest coal miner, expects prices of the raw material to set new records as demand growth in Asia, led by China and India, outpaces supply. India will raise purchases at a faster pace in the next two years, compared with 2007 and 2008, as the nation completes power plants, Philip Gasteen, head of marketing and logistics, said during the McCloskey Group coal conference in Singapore yesterday. Indonesia, the world's second-biggest thermal coal exporter, is promoting coal-fired power output to cut oil use. Benchmark prices at Newcastle, the world's biggest export harbor for thermal coal in Australia, dropped $4.71 to $134.45 a metric tonne in the week ended February 22 after four weeks of records, according to the globalCOAL NEWC Index. Prices had climbed after heavy rains in Australia, power shortages in South Africa and snowstorms in China cut output. "Things got tighter because of growth,'' Gasteen said in the interview. China's export ban after the nation's worst snowstorms in 50 years will pull 8 million tonnes out of the Pacific basin during the first quarter and "is a big loss,'' he said. China, the world's second-biggest energy consumer, banned coal exports so that local utilities "don't have grounds to raise prices'' amid government efforts to curb inflation, Gasteen said. Vietnam's exports Vietnam, China's largest coal supplier, plans to reduce exports 32 per cent this year and gradually eliminate the sales to meet rising domestic demand, Nguyen Khac Tho, vice director of the Ministry of Industry and Trade's energy and petroleum department, said February 15. Exports may drop to a forecast 22 million tonnes from 32.2 million in 2007 and the government is recommending halting overseas shipments after 2015. Coal producers are keeping inventories at half of typical levels of 6 to 7 per cent of annual output because of rising demand, Gasteen said. Banpu is maintaining stockpiles at about 3 to 4 percent of annual production, he said. "Demand has been very high so producers have been shipping out higher proportions than production and not putting as much in stock ,'' he said. Gasteen declined to comment on prices being negotiated with Japanese customers for annual supplies starting in April. Australian miners are seeking between $125 and $136 a tonne under one-year contracts, compared with offers from Japanese utilities to pay $110 a ton, Peter Ball, vice president for marketing at PT Bumi Resources, Indonesia's largest thermal coal exporter, said earlier this week in an interview. In the year ending March 31, the price is about $55. Japan is Banpu's biggest export destination, representing 25 per cent to 30 per cent of its sales. Banpu also ships to buyers in Taiwan, Thailand, South Korea and Italy, Gasteen said.