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Euro coal prices flat on scant summer demand

European physical coal prices were flat on Monday as expectations of weak demand from utilities over the summer months kept a lid on prices.

Cargoes for delivery in August to Amsterdam, Rotterdam and Antwerp (ARA) traded at $75.00 a tonne on the globalCOAL trading platform, unchanged from Friday's settlement, while the October contract also traded flat at $75.85 a tonne.

Traders said most European utilities were well stocked with coal, which means there is little incentive for prices to rise. The summer months are traditionally a time of weak demand.

"Virtually all the states in Germany are on summer holidays, and in France most started to go on holidays last week and do not resurface until the last week in August," a coal trader said.

On the other hand, prices are being supported by ongoing fears about a reduction in supply from Russia, he added.

"We are still trading at a premium to the lows we saw last month, before prices rallied on fears of sanctions being imposed on the Russian energy sector," the trader said, adding however that the premiums were slowly being unwound.

The October contract is still up almost 2 percent since the beginning of July but is down on the $78.40 per tonne it hit on July 28, a day before details of the sanctions emerged.

European Union governments reached a deal last week to impose economic sanctions on Russia, targeting its oil industry, defence, dual-use goods and sensitive technologies, but avoiding direct exports of coal and natural gas.

Russia is Europe's biggest supplier of oil, coal and natural gas, meeting around a third of demand for all those fuels, according to Eurostat data.

Source: Reuters