Steam coal prices move up with oil on Iranian tension

Thursday, 05 Jan 2012

Reuters reported that physical prompt coal prices moved slightly higher on Wednesday, in line with gains in oil due to growing tension between Iran and the United States and European Union.

A few index inked DES ARA trades took place but no fixed price trades.

A January loading South African cargo was bid at USD 108.50 and offered at USD 112.50, up 25 cents.

A February cargo was bid at USD 104.50, while a March cargo was bid at USD 105.00, unchanged.

A January DES ARA cargo was bid at USD 108, up USD 1.00

A February DES ARA cargo was bid at USD 110.00 and offered at USD 115.00, up USD 1.50

Unless there are fresh supply disruptions, prices look set to continue to drift lower, traders and utilities said.

Coal would not be immune to a spike in oil prices if the United States and EU decide to place an embargo on Iranian oil imports and this escalates.

The US and EU on Wednesday agreed in principle to ban Iranian oil imports but have yet to decide when an embargo would come into effect.

Iran has threatened to close the Strait of Hormuz to oil shipping in response to sanctions.

(Sourced from Reuters)