* Indian importers took advantage of cheap South African coal
* But soaring Indian orders pushed up South African prices
* European prices dip on mild winter weather outlook
* Seaborne coal trading may have peaked in 2014
SINGAPORE, Dec 2 (Reuters) - South African thermal coal prices have begun to sag from five-month highs as a steep premium over other suppliers makes it less attractive for importers like India.
Indian utilities, the main buyers of South African coal, snapped up cargoes from Richards Bay from September, initially taking advantage of a discount to other suppliers and gradually pushing up prices until they flipped into a premium.
Prices for South African cargoes GCLRCBPFBMc1 exported from the Richards Bay terminal soared by almost a fifth in November to $60 a tonne, but have since slipped back to $57.90 as its premium over competing cargoes from Australia made it less attractive.
Australian coal shipments GCLNWCPFBMc1 from the Newcastle terminal last settled at $51.80 a tonne, slightly below their November high of $52.60 a tonne.
"Imports from South Africa were higher because of lower prices. Since prices have increased due to demand from India, Indian buyers will now look to buy coal from Indonesia or Australia - they are only looking for cost-effective options," a trader said.
India's coal imports are likely to fall further as Coal India COAL.NS boosts output, analysts said.
Indian imports will likely fall by 5-10 million tonnes in the first half of 2015, said Dipesh Dipu, a partner with Jenissi Management Consultants.
India is looking to more than double its total coal output to 1.5 billion tonnes by 2020, after years of poor production which have crippled power supply.
In Europe, prices for cargoes into Europe's main ports of Amsterdam, Rotterdam and Antwerp (ARA) GCLARAPDSMc1 have fallen 7.5 percent in the past two weeks to $52.20 a tonne as rising Atlantic basin supplies clash with a slowdown in demand due to a mild winter outlook.
"Stronger physical coal flows ... resulted in higher supply chain capacity utilization, which is never a price-positive signal (and) we see the demand weaker too," commodity brokerage Marex Spectron said.
Average temperatures in continental Europe are expected to remain above the seasonal norm of around 4 degrees Celsius until at least the middle of December.
With China's coal imports sagging in China, India and also in Europe and North America, analysts said that seaborne coal trading may have peaked.
"Supply seems to have peaked in 2014 which ... was the record year in terms of seaborne trade. The price of coal duly followed the supply trend," Marex Spectron said referring to a one-third price drop in coal markets since then.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART-European temperature outlook:
http://reut.rs/1luKACw CHART-South African vs other coal prices
http://reut.rs/1N36eFr
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