Indonesia coal assoc sees prices at $95-$100 by yr-end

* Coal assoc sees prices up by yr-end on winter demand, rains

* Assoc sees Indonesia 2010 output at 305-310 mln T

* Assoc sees India becoming top buyer by 2012

Indonesia's coal association expects regional prices to pick up to $95-$100 a tonne by the end of the year as the rainy season cuts Indonesian supplies and as winter demand picks up from regional utilities.

Bob Kamandanu, chairman of the Indonesia Coal Mining Association, forecast Indonesian production in 2010 at 305-310 million tonnes, slightly higher than a forecast last month for 300 million tonnes. The association had initially expected 320 million tonnes, but heavy rains have been hampering miners.

"I think prices could climb to $95-$100 a tonne because the weather is normally bad at the end of the year while winter demand will pick up," Kamandanu said on the sidelines of a conference on Tuesday.

Australian thermal coal prices, a benchmark for Asia, fell to an eight-month low below $86 a tonne in August on tepid demand from China, despite concerns over Indonesian output.

Prolonged rains in the usual dry season in Indonesia, the world's top thermal coal exporter, have hit output of commodities from coal and tin to coffee. 

Kamandanu said Indonesia could also see higher demand for its coal because of congestion problems affecting shipments from Australia's Newcastle port, which analysts say could constrain exports for at least another two years. 

"If Australia can't meet their supply contracts, there will be a shifting of demand to Indonesia. That will drive up the price," he said.

Longer-term, he expected India to overtake Japan as the top buyer of coal from Indonesia, as Indian utilities seek coal to power the country's fast-growing economy.

"India's imports of Indonesia coal may jump to 70 million tonnes in 2012... I think India will take over Japan as the top buyer," said Kamandanu.

India's spot coal purchases from the global market will revive by November if prices remain at current levels and freight rates drift lower, importers and traders say.

India will import 40 million tonnes in 2010, versus Japan's roughly 60 million tonnes a year, according to the association. According to Japanese government data, Japan only imported 17 million tonnes of coal from Indonesia in the first half of 2010. Reuters