Coal news and updates

Powder River Basin coal prices drop in late trade as six-day run higher ends

Powder River Basin coal prices drop in late trade as six-day run higher ends

The physical Powder River Basin 8,800 Btu/lb contract dropped 50 cents between trades Friday in the US over-the-counter thermal coal market, likely prompted by a motivated seller wanting to move tons.

The physical PRB 8,800 contract for September first traded Friday at $11.25/st, level with the contract's last trade Wednesday. Near the close of the 2:30 pm EDT assessment time stamp, the contract traded at $10.75/st.

A follow-up bid and offer were reported at $10.75/st and $11.10/st.

"I think it was just a one-off transaction," a trader said regarding the late trade. "Someone came down and smashed a bid."

The front-month contract had been moving higher, notching a six-day run to the upside since it was assessed at $10.20/st on July 30. The contract was assessed Thursday at $11.30/st.

Platts assessed the front-month (September) contract Friday at $10.85/st, down 45 cents from Thursday, based on broker marks.

The decline was similar to a pattern in late July, when the contract moved higher for seven straight days, starting from $9.90/st on July 15 until it reached $11.40/st six days later. The following day it was assessed at $11.30/st, then fell 7.1% the following day to $10.50/st, based on lower bids.

In the swaps market, the PRB 8,800 contract was active Friday as the Cal 2016 contract traded three times for $11/st. Prior to Friday, the contract last traded Tuesday at the same price. The contract traded as low as $10.50/st in late April and as high as $14.80/st in February 2014.

The financial September contract also traded three times Friday, going twice early in the day for $11/st, then trading at $10.90/st late.

In the Central Appalachia futures market, the CAPP barge contract was again shut out, and no bids or offers were heard. Platts assessed the front-month contract Friday at $42.80/st, unchanged from Thursday, based on broker marks.

A different trader said low barge prices means the spot market is largely dead, as many producers and traders are unwilling to sell at such low prices.

In the CSX rail market, the financial contract was not seen trading Friday and the physical contract was not heard bid or offered. Platts assessed the front-month (September) physical CSX contract at $43.90/st, down 5 cents from Thursday, based on broker marks.

The physical contract has not traded since July 16, when the August contract went for $44/st.

source: http://www.platts.com