APMDC Suliyari coal upcoming auction 1,00,000 MT for MP MSME on 1st Oct 2024 / 1st Nov 2024 & 2nd Dec 2024 @ SBP INR 2516/- per MT
Registered User
New UserPrices dip with weakening gas, oil markets
08 Jul 2014
European physical coal prices for delivery in August fell along with weakening oil and gas markets on Monday and the drop was further supported by a trading house selling down its stock, traders said.
Cargoes for delivery in August to Amsterdam, Rotterdam and Antwerp (ARA) traded at $71.60 a tonne on the globalCOAL trading platform, down $0.2 from Friday's settlement.
Traders said that the main price drivers had been weaker oil and gas markets.
"Benchmark UK gas prices hit fresh lows today and oil is also down, so coal came under pressure as well as it is a competing fuel to oil, and especially gas," one coal trader said.
Traders said that coal had further come under pressure by a major trading house offloading its physical stocks.
"The same trader that aggressively bought physical coal in the last quarter of 2013 is now selling its stock," another coal trader said.
The weakening physical coal market has also affected futures trading. API2 2015 coal swaps contracts have come down from a price range of $80-84/mt that dominated trading between January and May, to under $79 a tonne in June.
Analysts said that the low coal prices were forcing many producers to operate at a loss, and that more mines would have to reduce production or close down before prices would recover significantly.
"A growing share of the seaborne supply community is operating at negative margins to cash cost," Morgan Stanley said on Monday in a research note.
"While some of the top global miners have either halted operations or slowed expansion plans, current price dynamics suggest we need to see more to assist in a price recovery, including a slowdown in U.S. exports," the U.S. bank added.
Source: http://af.reuters.com/