Euro Coal-Sept DES ARA trades at $87.50/T, up $1
Monday, 16 July 2012 | 00:00
Physical prompt coal prices were bid slightly higher on Friday after five days of consecutive falls and few trades were reported.
Coal was particularly illiquid on Friday but was partly bolstered by a 1 percent rise in oil prices while it ignored falls in European power prices on more renewables and lower demand.
Trade and end-user buyers remained for the most part on the sidelines, waiting for the market to steady.
"There have been some people who bought at over $90 on the June rally who've now been selling at $84. Meanwhile, nothing much has changed," one European trader said.
Some production cuts have been made in higher-cost exporting countries, which will help prices stabilise in the second half of the year but the determining factor for prices will be global economic growth, not just China's, Credit Suisse said in its latest commodities outlook.
In the nearer term, the outlook remains bearish with limited scope for much of a move upwards from current levels.
"We see upside potential for natural gas in Europe driven by growing LNG cargo diversions to Asia," Barclays Capital said in a research note on Friday.
"We are less optimistic about coal, where upside is likely to be constrained by ample supply and weak demand," BarCap said.
A September delivery DES ARA cargo traded at $87.50 a tonne, up $1.00 from Thursday's last trade.
An August loading South African cargo traded at $1.00 a tonne below the API4 index.
An August loading South African cargo was bid at $84.00 and offered at $84.10, up around $1.50 on the bid.
A September South African cargo was bid at $84.50, up $2.50 from Thursday's bid but with no offer against it.
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