Coal news and updates

Coal-Weaker bids in physical market drag down futures

European physical coal prices were bid sharply lower on Thursday as traders appeared to be sufficiently covered for material while a public holiday in much of Europe on Friday drained the market of volume.

ARA coal, which typically originates in Colombia, Russia or the United States, was offered by sellers at $84.75 per tonne for December cargoes, down from Wednesday's settlement of $86.05.

Sellers of the January contract were offering coal at $83.25 down from $84.75 at the end of the previous day's trading, as utilities remained reluctant to buy coal after sharp price moves and hefty volumes last week.

"Two of Europe's largest utilities that were very active in the market last week have been largely absent this week. They may have enough coal in the short term and other generators haven't even bid for physical coal during much of this week," said one trader.

South African physical coal (Richards Bay) was also bid sharply lower, with the December contract bid at $80.50 and offered at $84.75, compared with a previous settlement of $85.40.

The trader said the rumoured surge of buying in South African cargoes by a European trading house over recent weeks has ebbed this week.

API2 coal futures for 2014 delivery into Europe fell to $82.30 on Thursday, according to figures from brokers, down $0.75 from the previous settlement.

They were headed back towards a four-year low of $80.25 seen in mid-October and Relative Strength Analysis showed the contract at 42 points, down from 64 around a week ago.

Source: Reuters