Euro coal price up by 25 to 50 cents with oil gains

Wednesday, 07 Dec 2011

Reuters reported that physical prompt coal prices moved up by around 25 to 50 cents on Monday in line with oil's gains.

No fixed price trades were reported and demand remained minimal in Europe although steady enquiries are still coming through from China for January cargoes and several new Indian tenders have been issued.

One exporter said that "Oil's been the driver again, fundamentals are taking a back seat but the gap between API4 swaps and Richards Bay prices is too wide again and that's putting off buyers.”

Some analysts are forecasting a fall in prices from Q1 due to growing supply and limp demand but they caution that any further surge in oil will keep a floor under coal and stop a drift below $100.

A utility trader said that "South African coal looks on paper as if it's very good value compared with Indonesian into India but it remains to be seen what they'll actually buy.”

Chinese trade importers have said repeatedly during the past few months that they are not looking for spot cargoes due to high port stockpiles and credit issues but China imported a record level of South African coal in October and November.

(Sourced from Thomson Reuters)