Global coal demand will probably stagnate in 2009 after years of expansion because the slowing world economy is curbing power demand, Merrill Lynch & Co said. Coal is burned for about 40 per cent of global power, according to German coal group Verein der Kohlenimporteure e.V. The world economy will contract 1.3 per cent this year, the International Monetary Fund has said. Manufacturers have responded by cutting jobs and output, lowering power needs. After phenomenal increases in the range of 4 to 8 per cent over the past five years, global coal demand would likely remain flat this year, Merrill analyst Francisco Blanch in London said in a May 15 report, calling the outlook particularly dire in the US and Europe. Global energy demand was still frail and coal output in key regions was expanding, he said, Coal-export prices at South Africa's Richards Bay, Europe's biggest source of thermal coal, fell 4.5 per cent last week and more than halved in the past 12 months, to an average 556.15 a tonne, according to McCloskey Group Ltd data. Prices at Australia's Newcastle port, an Asian benchmark, dropped 0.6 per cent to $63.33, according to the global COAL NEWC Index. Seaborne coal prices, which include freight costs, will take at least three to six months to move toward $80 a tonne, Blanch said. The price of coal delivered to northwest Europe last week was $62.45 a tonne, McCloskey figures show.