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Friday, December 2, 2011

Euro Coal-Prices stable on equities, euro gains

Dec2, 2011

* No fixed price trades, API4 index deals at -$1-1.20
* Macros continue to be main driver

LONDON Dec 1 (Reuters) - Physical prompt coal prices were little changed on Thursday despite a fall in oil as signs of further economic slowdown in Europe and a weaker factory sector in China outweighed encouraging U.S. manufacturing data.

No fixed price trades were reported but there were several indexed trades for South African cargoes.

Unless supported by strong oil, equities and a weaker dollar, coal prices could drift lower between now and January because short-term fundamentals are bearish, traders and end-users said.

World stocks edged higher on Thursday while the euro gained for the fourth day and a Spanish debt sale saw good demand, keeping hopes alive that the euro zone debt crisis may be contained.

Further ahead in 2012 the outlook is less grim for coal and other bulk commodities.

"We continue to favour the fundamentals for copper, coal and iron ore," Credit Suisse said in its Metals and Mining research note.

Lack of spot demand from China and India has left suppliers struggling to place prompt cargoes already unwanted in Europe and there are almost no bullish fundamental factors.

South African exporters have sold their December cargoes but some players further down the cargo chains formed when cargoes trade multiple times are still battling to find buyers.

A South African prompt cape was being offered on Wednesday with no takers.

Global stocks rallied and the dollar slid on Wednesday after the world's leading central banks acted jointly to ensure financial markets rocked by the euro zone's escalating debt crisis have enough funding.

The banking measures bolstered the appetite for risk, lifting assets such as stocks and commodities while leading investors to dump safe-haven dollar and government debt.


No fresh fixed price trades were reported.

A February South African cargo traded at $1.20 a tonne below the API4 index.

A Q2 API4 index trade also took place at $1.00 a tonne below the index.


A January South African cargo was bid at $103.25, unchanged.

A February South African cargo was bid at $95.00. A January delivery DES ARA cargo was offered at $112.00, down $1.00.

A February DES ARA cargo was bid at $112.50.

(sourced Reuters)

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