Saturday, February 12,
Bloomberg reported that Australian coal’s premium over Europe is balanced to dilate as economies in China and India expand after narrowing 57% in the past month as floods in Queensland receded and demand for winter heating eased.*
According to data compiled researcher IHS McCloskey in Petersfield of England, power station coal at the Australian port of Newcastle, a benchmark for Asia, cost USD 8.75 per tonne more than prices for delivery to the Amsterdam Rotterdam Antwerp region on February 4 down from 10 month high of USD 20.25 on January 14
Mr Emmanuel Fages head of carbon, coal, gas and power research at Societe Generale SA in Paris said that the market should first go through a correction period once winter is over. As Europe’s economic recovery stumbles along, investors should buy Newcastle 2012 futures and sell European ARA derivatives.
Booming markets in China and India are boosting purchases of Australian fuel with overall Asian coal demand forecast to rise 8% this year to a record 438 million tonnes. Consumption in Europe and Russia will expand 5% to 145 million tonnes amid slower economic growth and stricter environmental rules down from the 170 million tonnes used in 2008. According to IHS McCloskey data, Newcastle power station grade coal climbed for the first week in 3 gaining 1.2% to USD 126.75 per tonne in the 7 days to February 4.
Source :Bloomberg
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