Reuters reported that physical prompt European thermal coal prices rose by around 50 cents to USD 1.00 a tonne on Friday, bolstered by strong swaps values in line with stronger oil and the euro, but weak fundamentals could reassert themselves soon and pull prices down.

PRICES

A September South African cargo was bid at USD 86.50 and offered at USD 87.00, up 50 cents on the bid but down 25 cents on the offer.

An October South African cargo was bid at USD 87.00, also up around 50 cents.

TRADES

An October DES ARA cargo traded at USD 91.25, up by USD 1.25 from Thursday

One European trader said “Fixed prices have gone up today but the discounts to indexes have increased.”

As per report, the discounts offered to the API2 index have increased to USD 2.40 a tonne below index from around USD 2.00 earlier in the week.

The traders said “These prices are not justified by fundamentals. Until inventories at ports in China, India and Europe's Amsterdam-Rotterdam-Antwerp import hub are consumed and the flow of discount-priced cargoes unwanted by China dries up, the market cannot start genuinely to stabilize.”

Chinese traders have this month scrapped deals to import at least 2 million tonnes of coal, due to plentiful supply and lower than expected power demand.

China's contract non-performance is getting worse rather than better, industry sources said, and now Indian end users and a few smaller traders are also trying to escape higher priced commitments.

Source - Reuters

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