Prices Mixed as June Contract Rises While July Declines
- ARA coal for June regains some ground after recent decline
- ARA coal for July continues to fall
European physical coal prices were mixed on Wednesday, with the June delivery contract regaining some ground after trading at its lowest level since late February in the previous session, while the July contract continued to decline.
Cargoes for June delivery to Amsterdam, Rotterdam and Antwerp (ARA) were trading at $72.50 a tonne on Wednesday afternoon, up 30 cents since the previous close and above a three-month low of $71.85 hit in the previous session.
Traders said that some buying may have been prompted by utilities running short of supply towards the end of the month.
However, ARA coal for delivery in July continued to slide because of plentiful supply. July prices were down 70 cents at $76.20 from the previous close, with 100 lots traded, according to the GLOBALcoal trading platform.
On the supply side, global coal shipments have doubled to more than 800 million tonnes between 2003 and 2013, industry sources have said, while demand growth has slowed because of economic weakness in industrialised and emerging markets.
Adding to the pressure on the European market is the seasonal drop in summer demand as well as shutdowns at coal-fired power plants or delays to new plants.
In the United States, meanwhile, the Environmental Protection Agency is expected to propose new rules on June 2 to help to reduce power plant emissions as part of President Barack Obama's efforts to combat global climate change.
Coal industry lobbyists say the new rules will probably raise household electricity costs, result in power supply disruption during heatwaves and cold snaps and trigger job cuts at coal mines and manufacturing plants.
(Reporting by Nina Chestney; Editing by David Goodman)