Montel reported that slackening Asian coal import demand is weighing on FOB South Africa prices and widening the spread between API 2 and API 4 contracts.

The front quarter API 2 contract has reached its highest premium, of around USD 4.65 per tonne against the equivalent API 4 contract since the beginning of the year.

The contract, which reflects South African supplies including cost, insurance and freight to Europe, was trading at a discount of more than USD 3 per tonne to the API 4, which excludes the CIF component, at the beginning of last month.

The widening of the spread largely reflects muted Asian buying interest for South African coal, especially since Chinese buyers concerned about falling prices have defaulted on some 30 cargoes, he said.

Source - Montel

(www.coalguru.com)