* April DES ARA trades at $94/T
* April S.African trades at $103.45/T
LONDON, March 14 (Reuters) – Oversupply pushed
European coal prices down by over $1.00 on Wednesday, with
further price falls likely, traders and analysts said.
An April DES ARA multi-origin cargo traded at $94.00 a tonne
on Wednesday, $4.50 below the API2 index and down nearly $2.00
from Tuesday’s offer level.
“That April trade wasn’t for U.S. coal which trades at a
discount, it was delivery into Rotterdam so totally standard and
I can’t remember I saw a trade at such a big discount, that is
extremely bearish,” one trader said.
Prices are forecast to at best remain range-bound in the
first half of the year or drift lower as supply increases, VTB
Capital said in a research note.
With projected growth of over 20 million tonnes supply from
Australia and over 26 million from Indonesia, prices could fall
in both the Atlantic and Pacific markets, VTB said.
But in the second half, VTB expects a global coal deficit of
7 million tonnes due to higher imports by China, India and
Japan.
A deficit of 7 million tonnes is almost negligible within
the annual seaborne thermal coal trade of 750 million tonnes,
but a shift back to a more balanced market should be positive
for prices.
Continued…
