19-01-2018

CIF ARA thermal coal spot market moves down with paper

The European delivered thermal coal spot market decreased in price Wednesday due to a continued lull in sentiment on the back of low buyer interest, coinciding with the front of the curve in the financial market coming off as well.

With coal burn low in Europe and stocks high, sources said there has been no reason for utilities to purchase material on the spot market.

A Northwest Europe-based trader said utilities were better stocked going into winter this year than the previous winter to avoid paying seasonal premiums.

The source said the ongoing Cerrejon contract negotiations could potentially impact prices in Europe if a strike is not averted.

Friday is the deadline for negotiations with a potential strike vote looming.

A UK-based broker said the market remains quiet, like it has been since the start of the year, explaining that US material has continued to be desired by consumers.

A 50,000 mt mufti-origin February-loading cargo was bid at $94.50/mt against an offer for the same volume and loading date at $96/mt, with no trades reported.

PAPER MARKET REGRESSES

In the European thermal coal futures market Wednesday, prices fell across the curve due to weaker numbers in the German power market and poor fundamentals in the physical coal market pulling the front of the curve down.

The Cal-19 contract opened the day down 65 cents at $84.50/mt, trading within a 75-cent range, and last trading at $84.60/mt.

The Cal-19/20 spread varied throughout the day due to higher price volatility in the Cal 20- contract, with an end-of-day spread of $4.10/mt.

Sources said the market has been lacking market driving factors and has been influenced by Newcastle as a result since the start of the year.

Australian FOB Newcastle 6,300 GAR futures increased around 35 cents across the curve Wednesday, with the Cal-19 contract at $90.55/mt, down 85 cents on day.

Source: Platts

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