Coal news and updates

European coal prices will increase at the end of August as temperatures start dropping and lower Ukrainian production curbs supplies, according to brokerage Marex Spectron Group Ltd.

 

“Our analysis of the jet-stream movement for the next two weeks suggests that there may be another cold spell at the end of the month,” Georgi Slavov, head of basic materials research at Marex Spectron in London, said in an e-mailed note. Coal’s 5 percent climb from a five-year low in July coincided with cooler weather brought by a low-pressure area over Europe, he said.

 

Steep declines in Ukraine’s coal production amid the country’s civil unrest also contributed to higher prices, Slavov said. Thermal coal output last month at Ukrainian miner Coal Energy SA dropped 94 percent from a year earlier to 2,385 metric tons as it cut operations to ensure worker safety. Ukraine is Europe’s fourth-biggest coal producer, BP Plc data show.

 

“The complete collapse of the mining industry in Ukraine is threatening to turn the country from a meaningful exporter to a net importer of coal,” Slavov said.

 

Coal for delivery next year climbed to a two-month high of $80.90 a ton last week from $77.25 a ton on July 16, according to broker data compiled by Bloomberg. It was trading at $79.25 a ton as of 1:07 p.m. London time.

 

A gradual decline in production in the Atlantic and Pacific basins will start to reduce surplus supply in the seaborne market, he said.

 

 

Source: Bloomberg