European prompt physical coal
prices were little changed on Monday but two Q3 DES ARA trades
took place at over $3.00 a tonne below the API2 index, a level
which some players took as a bearish signal.
July DES ARA cargoes were valued at around $96.50 a tonne on
Monday at the time the index-linked trades went through, valuing
them at around $93.00, traders said. "This doesn't bode well for Q3 prices if anybody's willing
to sell at that kind of a discount now," one trader said.
Stockpiles in Amsterdam-Rotterdam-Antwerp are significantly
higher than year-ago levels, which will help cap any price rises
during the next several months. EMO, EBS and OBA stockpiles were over 5.6 million tonnes at
the end of last week, with a further 2-3 million in smaller
terminals.
Most of this coal was pre-bought by utilities and traders
who believe the market contango justifies carrying stocks until
the winter, when consumption and prices are expected to be
stronger but the size of inventories has got to be a
disincentive to buy fresh cargoes, they said.
There were no fixed-price trades reported.
The longer the market stays in a fairly tight price range
and the longer it takes for anticipated Chinese high-volume
buying to emerge, the less liquidity there is in the market and
less appetite to trade it, traders said.
"For every buyer, there are about four sellers but even with
bid/offer spreads 50 cents apart, very little is trading,"
another trader said. South African prices were also little changed but bids moved
down by around 50 cents with no trades reported.
TRADES
Two July DES ARA index-linked trades went through on
globalCOAL at $3.10 a tonne below the API2 index.
PRICES
A July DES ARA cargo was bid at $96.25 and offered at $96.75,
little changed.
A June South African cargo was bid at $99.50 and offered at
$100.00, down 50 cents.
Source: Reuters.com
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