Monday, 13 Feb 2012
Germany's biggest program of solar and wind power production has driven European coal prices below South Africa's for the first time in 10 months.
According to IHS McCloskey data, coal in northwest Europe cost USD 3.55 a metric tonne less than supplies from South Africa's Richards Bay yesterday, the widest discount for next-month prices since May 5, 2010. According to Barclays Plc, the difference is likely to keep increasing as European demand weakens and Asia boosts imports from South Africa.
Mr Bevan Jones a general manager at London Commodity Brokers Ltd said that “Producers are asking themselves if this is a seismic shift, and I think this move probably is sustainable.” He said that “Europe remains well supplied by the US, Colombia and Russia, while demand is on its weak side. Meanwhile, demand is consistent in Asia.”
Coal prices in Europe have fallen 7.5% this year as nations increase the amount of energy they get from alternative sources. Germany, the continent's biggest power market, installed a record 3,000 megawatts of new solar panels in December, the Bonn-based Bundesnetzagentur, the network regulator. Coal stockpiles at the biggest storage site in the Netherlands are 6.7% above year ago levels, according to Europees Massagoed-Overslagbedrijf BV, which operates the terminal.
(Sourced from Bloomberg)
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