Coal news and updates

Rail-delivered (CSX) Central Appalachian thermal coal for prompt delivery rose 75-95 cents/st on Monday, widening its premium over barged coal prices as US coal was seen trading in the European-delivered spot market.

 

CSX physical January rose 75 cents to $61.50/st on Monday as a January DES Rotterdam cargo (50,000 mt) traded at $84/mt, about a $2.50 premium to the January API2 (CIF ARA) swap.

 

In the US over-the-counter market, the January physical contract also traded at a premium to the swap market.

 

CSX physical January traded at $61.50/st for one train twice, including one trade shortly after the 4 pm EST Market on Close. The contract was bid at $61.50/st at the close. In between the two trades, the contract was heard to have traded at $61.25/st for one train.

 

In the paper market, CSX January over February traded at minus 10 cents/st for 100,000 st. January was cleared at $60.90/st and February was cleared at $61/st.

 

In the prompt quarter, CSX financial over CAPP barge Q1 2014 traded at $6.25/st for 15,000 st/month over 10 barges/month, at $5.85/st for 30,000 st/month over 20 barges/month, and at $6/st for 15,000 st/month over 10 barges/month.

 

On Monday, the river/rail spread for January widened to minus $7.10/st from minus $6.50/st on November 27. The spread for Q1 2014 widened to minus $6.60/st from minus $5.80/st.

 

According to Platts data, the front-month spread widened to as much as minus $10.05/st on September 18, 2012. On the same date, the prompt-quarter spread widened to minus $8.35/st. Both are the widest discounts since the start of 2012.

 

US MATERIAL TRADES IN EUROPEAN MARKET

 

A 50,000 mt DES Rotterdam January cargo of multi-origin coal with US optionality traded through broker Ginga Petroleum at $84/mt, $1.25 below the last January trade reported Wednesday and $1 down from Friday's best offer.

 

A London-based trader said that US thermal coal is currently "a well sought-after origin" due to the Drummond worries, and shipments to Europe were commanding "a very big premium."

 

The physical January trade was $2.50 above the January API2 swap trade of $81.50/mt, cleared on ClearPort at 5:38 am CST.

 

Even with the CIF ARA spot price edging higher to $84/mt, the CIF ARA-FOB CSX spread, or implied transportation spread, narrowed to $22.89/mt from $24.54/mt. With the spot Panamax rate of $13.50/mt from the US East Coast to Rotterdam, that leaves only about $9.39/mt to cover US midstream costs from mine to vessel.

US East Coast thermal coal (6,500 kcal/kg NAR 1% sulfur) was assessed up 50 cents to $81.75/mt.

 

 

Source: Platts