Wednesday, 13 Jul 2011
Prompt physical coal prices fell by around USD 1.00 a tonne on Monday in line a 2% drop in oil and in the absence of fresh buying from end users in Asia and Europe.
Few coal trades were reported during the past week as Indian and Chinese buyers held off in anticipation of weaker coal and freight values.
One source said that "The Indians and Chinese are nowhere in the market right now, for any quality of coal, it seems, they're under no pressure to take prompt cargoes.”
A European trader said that "The overall energy complex weakened today and without much in the way of fresh trades, coal just followed oil down.”
Supply side problems from Russia, where the usual summer shortage of rail cars is already delaying exports by several days, are expected to continue until September but end user demand is so weak in Europe that consumers said they would welcome shipment delays.
Although South African exports are also capped by a lack of rail capacity, producers have found they have more spot cargoes of standard grade coal to sell in July, August and September than they had anticipated due to the cooling in Indian demand.
Another Europe based trader said that "South African coal isn't pricing in competitively to India or anywhere else still, even the cheaper low-grade doesn't work.”
(sourced from Reuters)
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