Prompt physical coal prices fell by around $1.00 a tonne on
Tuesday in line with an earlier dip in oil and pressured by oversupply,
particularly in Europe.
March loading South African coal was bid at $104.00/MT FOB
Richards Bay, keeping a slight premium over April and May cargoes but $1.00
lower than the previous day.
But the accumulation of unwanted coal cargoes of every
origin is also weighing on prices and will continue to do so until Asian demand
revives.
“You can easily find all sorts of coal, every origin is
available and U.S. material is being offered by traders, utility traders and
producers directly – there's still too much coal,” a source at a major European
utility said.
U.S. thermal coal with a sulphur content of anywhere from 1
percent to 4 percent is still flowing to Europe but sellers are also having to
look at new markets in India and Turkey .
Indian traders said they have been offered and bought U.S.
coal with around 3 percent sulphur at $101-110 a tonne CIF India, which nets
back to $60-65/T FOB – a level below most producers' cash costs.
The demand-supply imbalance in the market is said to
continue until China resumes substantial spot buying, which may not be for
another month or two and till then the pressure will be built upon Atlantic
prices.
Some of the recent trades include a second half March
loading South African cargo was bid at $105 and offered at $105.65, down around
$1.00 and an April South African cargo was bid at $104.00, also down $1.00.
Source: Reuters
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