Coal news and updates

The European-delivered CIF ARA physical thermal coal spot market fell back into a contango structure Thursday, with March cargoes offered around $1 below April amid scant demand and plummeting offers.

 

Broker sources said March was offered at $74.25/mt, $2.30 under a fixed price trade Wednesday.

 

A shipment of Australian, Polish or South African coal was bid at $75/mt, while a multi-origin vessel with US optionality to be delivered into Rotterdam was offered at $75.25/mt. The offer was $1.25 down from a similar April offer the day before.

 

Platts assessed the the price of European-delivered CIF ARA thermal coal basis 6,000 kcal/kg NAR and for delivery within the next 15-60 days at $74.65/mt, down $1.85 cents on the day and its lowest since August 15.

 

A London-based trader said that lower coal burn in Europe is "forcing some utilities to sell or at least not buy cargoes, [with] few people looking to sell March now."

 

A trader at a northwest European utility denied that there is a direct correlation between milder temperatures and dropping prices, since it is still winter and there is some need to consume coal.

 

However, he noted it was correct to say that "some players are more bearish."

 

Sources said that there was heightened illiquidity in the brokered market, with prices under pressure from lack of purchasing necessity due to mild weather and enough coal on supply.

 

The scant demand for coal has practically erased previous bullish sentiment on the back of an export ban on Drummond's Colombian thermal coal volumes, with the US-based miner believed to restart loading operations by the end of March.

 

A second London-based trader believed that contango would be "the natural state of the market" unless there were any additional supply disruptions further down the line.

 

Outside Platts' assessment window, a 50,000 mt multi-origin DES Amsterdam-Rotterdam cargo traded at $74.75/mt with exchange of futures for physical (EFP) terms attached, the lowest DES ARA trade since September 11.

 

RICHARDS BAY FOB SHEDS 15 CENTS

 

South African Richards Bay FOB prices fell just 15 cents on the day, with front-months partially supported by a supply backlog caused by an early February export outage at the Richards Bay Coal Terminal.

 

Platts assessed the price of physical Richards Bay thermal coal basis 6,000 kcal/kg NAR and for loading within the next 7-45 day period at $78.30/mt FOB, down 15 cents from Wednesday and its lowest since September 16.

 

The utility trader said that he felt the market "was coming out of a spell," which pointed at prices "relaxing a bit."

 

He believed that the higher-priced March loading cargoes were indeed related to a tighter market following the week-long export stop at RBCT in early February after a power failure.

 

The London-based trader said that the strong March-loading offers were an indication of a tighter March as "sellers [are] demanding a premium for it."

 

RBCT said in a note published late Wednesday that the terminal loaded 318,021 mt of coal over a recent 24-hour period and there were five vessels waiting to load and 26 vessels at anchorage.

 

It also said that current stock levels were at 3,455,149 mt.

 

Broker sources said that March loading cargoes were bid at $78.75/mt FOB, 25 cents under Wednesday's bid, and offered at $79/mt.

 

April was bid at $74.25/mt and offered at $74.50/mt, which compared with the previous day's trade at $75/mt.

 

 

Source: Platts