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Euro Coal Prices Drop as Low Summer Demand Kicks In

Posted by May 9, 2014

European physical coal prices dropped on Friday as demand across the region falls sharply as a result of mild weather and healthy stocks.


Cargoes for prompt delivery this month to Amsterdam, Rotterdam and Antwerp (ARA) were trading at $72.90 a tonne, down $1.15 since their last settlement. Cargoes for delivery in July traded at $74.80 a tonne on the GlobalCOAL platform, down $1.25.

Traders said that the lower prices were a result of weakening European demand.

"We've had a mild winter and spring, so coal stocks are very high. This means that we are burning down the stocks before making new orders," one coal trader with a utility said.

"I'd expect prices to remain weak and order volumes low until late August, when the market should lift and come more lively as utilities begin restocking," he added.

Standard Bank said in a research note published this week that Europe's thermal coal market was well supplied. "Coal supplies to Europe will increase as Drummond (in Colombia) ramps up capacity (and) other Colombian suppliers are also increasing shipment rates, leading to an improving 6-10 million tonnes run-rate from Colombian miners across Q2," it added.

(Reporting by Henning Gloystein; Editing by Pravin Char)

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