* API2 2012 hits technical resistance
* Falls in line with gas and power
LONDON, July6 (Reuters) - European coal futures dropped in value on Wednesday after encountering technical resistance in the morning and then reacting to bearish sentiment in the oil and euro markets.
After rising above $130 a tonne on Tuesday, the API2 2012 coal futures contract on Wednesday opened just below that level and traded down to $128.75 a tonne at 1435 GMT.
The move mirrored similar developments in European benchmark gas and power contracts.
German 2012 baseload (24 hours delivery) power failed to rise to and sustain itself above 58 euros per megawatt-hour, and UK NBP Winter 2011/2012 gas prices had the same trouble with 72 pence per therm.
"Coal, gas and power prices are tightly correlated at the moment, and when oil and the euro fell in the late morning that gave traders another incentive to not bet on rising prices today," one energy trader said.
Despite the drops, technical indicators in the coal futures market remained strong as the API2 2012 price remained above its 50 exponential daily moving average (DMA) value of $128.40 a tonne, and the moving average convergence-divergence (MACD) signals also looked bullish.
"The MACDs only just turned bullish, and I think there is some appetite in the market to push prices higher, so today's drop may well have been a mere blip in a bigger move up," another trader said.
On the physical side, mining giant Xstrata has agreed to sell Australian thermal coal to major buyer Tokyo Electric Power at $127.50 a tonne freight on board from October, sources familiar with the talks said on Tuesday.
The TEPCO deal was a 24 percent hike from prices agreed in 2010 and around $2.50 less than the record April price agreement signed earlier this year.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment