Coal news and updates

PRB 8,800 coal contract prices drop in US OTC market as natural gas futures plummet

A steep 10% drop in natural gas prices Monday dealt a blow to Powder River Basin 8,800 Btu/lb physical and financial contracts in the US over-the-counter thermal coal market.

NYMEX November gas futures Monday fell 22.4 cents to settle at $2.062/MMBtu, as traders pushed the prompt-month contract to a multi-year low. The last time the prompt-month contract settled lower was April 26, 2012, at $2.036/MMBtu.

"Gas dropping like that isn't going to help coal prices," a coal market participant noted.

While no physical coal deals were reported Monday on the first day of the December front-month PRB 8,800 contract, multiple brokers reported a bid-offer range of $10.50/st at $10.90/st. The front-month (November) contract last traded higher Thursday at $11/st

Platts assessed the PRB 8,800 front-month (December) contract price at $10.75/st, down 25 cents from Friday, based on the midpoint of a reported bid-offer range of $10.50/st at $10.90/st.

PRB 8,800 financial contract prices also dropped Monday.

The PRB 8,800 Cal 2016 futures contract cleared three times Monday, dropping 20 cents during the day"s deals and 45 cents since its last trade. It cleared twice Monday at $10.70/st before clearing lower at $10.50/st.

The contract last cleared October 13 at $10.95/st.

The final trade Monday at $10.50/st matched the lowest price the PRB 8,800 Cal 2016 futures contract has been seen to clear, which happened last on April 27.

The PRB 8,800 Q1 2016 futures contract also fell Monday after clearing at $10.50/st and $10.40/st, respectively. The contract last traded Thursday at $11/st.

"PRB took a bit of a hammering today," one broker said.

CAPP CONTRACTS SHUT OUT

Brokers reported no Central Appalachian rail (CSX) or barge deals Monday, and no futures contracts were seen to clear.

OTC participants said the market for the CSX front-month (December) contact was quiet, with no bids or offers heard Monday. One market player noted a wide bid-offer range for a November physical trade at $35.50/st and $37/st.

Platts on Monday assessed the CSX front-month (December) contact price at $36.90/st, up 40 cents from Friday, based on higher broker marks. The CAPP barge contract was assessed at $41.95/st, unchanged from Friday, based on broker marks and a lack of market activity.

source: http://www.platts.com