Euro Coal-Prices dip despite oil steadying

Sunday, Dec11, 2011

* Danube water levels rise
* Japanese start term contract talks

LONDON (Reuters) - Physical prompt coal prices dipped slightly on Friday after a week of limited activity which left coal tracking oil and currencies while fundamentals took a back seat.

Oil prices steadied at around $108 on Friday after the euro zone agreed closer fiscal union to save its currency.

Coal trading activity has already fallen off considerably ahead of the Christmas and New Year holidays - both end-users and suppliers have squared their books and have little appetite for new business, traders and utilities said.

Aside from some Indian tenders for supply through 2012, there has been little evidence of consumer buying interest this week in either Europe or Asia.

Water levels on Germany's Danube river have recovered to levels which allow fully-loaded barges to sail but unless there is an unexpectedly harsh winter, utilities said they are unlikely to buy more spot coal in December and January .

China, the key spot buyer this year, is still enquiring for prompt cargoes but new deals are not being done.

Stockpiles remain high at Chinese ports and there is a lot of wrangling between suppliers and importers over who pays the hefty demurrage costs for vessels forced to wait before discharging cargo, suppliers said.

Chinese thermal coal inventories are currently around 16 days and utilities are not in urgent need of supply .

Australian coal prices FOB Newcastle have remained flat at around $111 a tonne and are likely to remain at that level or drift slightly lower over the holiday period.

Negotiations between Japanese utilities and Australian suppliers for term contracts have already begun and suppliers are in no rush to settle because spot prices are $20 below the current 2011 contract price which was a record $129.85.

"A lot of people are already on holiday and that's reflected in the lack of bids and offers in Europe. The market's looking rather weak in the Atlantic and Pacific, it's been supported by oil and little else recently," one major European trader said.

"Chinese buyers are still enquiring and there is still some buying taking place," another trader said.

PRICES

A January loading South African cargo was bid at $101.50 and offered at $102.75, down 50 cents on the offer. A February South African cargo was bid at $100.00 and offered at $102.75, down $1.00 on the bid. A January delivery DES ARA cargo was offered at $110.50, down $1.00. A February DES ARA cargo was bid at $111.25 and offered at $111.75, down 25 cents.

(sourced Reuters)

China Bohai thermal coal prices fall for 3rd consecutive week

Friday, 02 Dec 2011

Thermal coal prices at major ports around Bohai Sea edged down further in the week ending November 30, marking its third consecutive week of declines, market sources said.

The latest Bohai-Rim Steam-Coal Price Index, or BSPI, indicates that the average price of thermal coal with calorific value of 5500 Kcal/kg dropped to CNY 847 per tonne, down CNY 3 per tonne from a week earlier when the price was down CNY 2 per tonne.

At Qinhuangdao port, the price of 4500 kilocalories per kilogram, 5000 kilocalories per kilogram, 5500 kilocalories per kilogram and 5800 kilocalories per kilogram thermal coal came to CNY 635-645, CNY 735-745, CNY 840-850 and CNY 895-905 per tonner respectively, decreasing CNY 5 per tonne as compared to the previous week.

The continuous fall in thermal coal price was mainly attributed to the high levels of inventory at power plants and main ports despite of the favorable factors that may somewhat stimulate the market demand, such as increasing coal consumption in winter season.

The thermal coal market was hurt again by rumors that the National Development and Reform Commission would put a cap on spot coal prices. It was reported that the NDRC ordered, in a statement released recently that benchmark spot prices with a heating value of 5,500 kilocalories per kilogram to be capped at CNY 800 per tonne.

(sourced steelhome)
China steel information centre and industry database

Russia coal exporters oppose rail tariff hike

Tuesday, 18 Oct 2011

Reuters reported that Russian coal exporters are lobbying against a proposed rail tariff hike of up to 15% due to take effect from January 1 because this could make some exports uneconomic.

The huge distance between Russia coal mining heartland in Siberia and ports on the Baltic and Pacific coasts is a major part of exporters cash costs.

Russia and the United States already have the highest cash costs globally of over $80 a tonne FOB and so need coal prices to remain high enough to give them a profit margin.

Russian exporters have cut exports when prices have fallen in the past.

Spot coal prices have held near the USD 120 mark for DES ARA cargoes for most of this year. The Federal Tariff Service FTS last week said that rail tariffs would rise by an average of 15% in 2012.

One exporter said "The latest we heard was a proposal to raise tariffs 6% on shorter routes and up to 15% on longer routes. A rise of 15% could cause problems for some companies that have higher-cost mines and routes to ports and could make it difficult for them to export."

Exporters speaking on the sidelines of the Coaltrans conference in Madrid said their companies senior managers were continuing to lobby authorities in a bid to reduce the proposed rail rates hike and hoped for something slightly lower than 15%.

Another exporter said "We don´t know exactly how far the tariffs are going to rise. We are waiting still for an official notification from the authorities."

(Sourced Reuters)

South Africa coal price fall draws out Indian buying

Thu Feb 10, 2011 2:41pm GMT
LONDON (Reuters) - A fall in South African thermal coal prices to $113 a tonne this week has started to draw out Indian buyers who have been sidelined since November, Indian traders said on Thursday.
Spot coal prices topped $120 a tonne in December from $90 in October on strong Chinese spot imports and spiked again in January after disastrous Australian floods.
During this period, Indian end-users stayed firmly out of the market and relied on stockpiles, deliveries of term contract coal and cheaper coal from Indonesia instead.
India's share of South Africa's coal exports has risen from almost nothing five years ago to an average of 30 percent a month.

The participation of these buyers and the Indian traders who supply them is also a crucial element of the global spot market - their withdrawal usually triggers a fall in prices but panic-buying and bullish sentiment was overwhelming last month.
"At these prices of around $113, $114 a tonne FOB Richards Bay some more people are looking to buy South African coal now, it's not a bad price," one of India's biggest trader importers said.
"Between December and February there were no physical demand reasons for prices to up $24 and then down $20, it was all artificial," he said.
India's Binani Cement Ltd this week bought a March loading South African cargo at $114 a tonne FOB, traders said.
A few of the smaller to medium-sized cement makers are likely to issue tenders now to take advantage of falling coal prices and extremely weak freight, traders said.
Indian end-users tend to focus on the delivered cost of coal and their trader suppliers are constantly comparing the cost plus freight of South African versus Indonesian coal.
There had been some fairly active re-selling of South African cargoes back to the original suppliers in January by Indian traders who replaced these cargoes with Indonesian material but this has dried up now, Indian traders said.

"We did see some of that last month but nothing much now," one South African producer said.
"It did make sense to take cheaper Indonesian. The freight was also more stable but current South African prices are not bad and the market looks like it's going to fall further anyway," another Indian trader said.

South African coal is preferred by many Indian end-users in the sponge iron and cement sectors for its consistent quality but because the market is so price-driven, consumers will switch quickly if delivered costs rise to unacceptable levels.
Prices are expected to come under further downward pressure as Indonesian exports start to flow again following confusion over export licences.
Around 3.5 million tonnes of mostly low-grade coal was held up but this is starting to move again.(sourced:Thomson Reuters)