Fri Jul 15, 2011
LONDON, July 15 (Reuters) - Prompt physical coal prices remained stable on Friday with few trades seen or fresh news to give the market clear direction, traders and utilities said.
The annual summer lull in activity has already begun in earnest, traders said, in both the Atlantic and Pacific markets.
Coal swaps and physical values had dipped in early trade but recovered as oil moved higher on Friday afternoon.
Gas prices also tracked oil upwards .
"Volumes have stayed very low and coal's just kept following oil but there are fewer key players active in the market this week," one European utility source said.
Oil rose by just over $1.00 on Friday as the market focused on the potential for a weaker dollar amid concerns about U.S. budget talks meant to cut deficits.
Coal swaps and physical have been range-bound but tracking oil's with little movement in prices during the past week.
Until end-user demand in Asia picks up from China, Japan and India, prices will stay in much the same range but drift towards the lower end of it.
Indian traders who have switched as far as possible to cheaper Indonesian coal instead of South African material have been experiencing quality problems with some of the recent cargoes, which had a lower energy content and higher moisture than expected but so far they have held off from buying more South African coal to blend with it.
Until South African prices fall back below $110.00 a tonne this coal will be too expensive for the Indian market, traders said.
TRADES
September delivery DES ARA traded via brokers at $122.75 a tonne, unchanged from Thursday.
PRICES
September DES ARA cargoes were offered at around $122.75 after the earlier trade.
An August loading South African cargo was bid at $114.00 with no offer against it, also unchanged.
A September loading South African cargo was bid at $115.75 and offered at $117.25, unchanged.
(sourced Reuters)
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