* Chinese inventories, weak spot demand pressure prices
* No fresh trades reported
LONDON May 4 (Reuters) – European coal prices crept higher
by 25 cents a tonne on Friday as the market steadied after
hitting two-year lows earlier in the week on weakening
fundamentals.
The high level of U.S. thermal coal exports – likely to be
around 45-50 million tonnes this year – combined
with rising Colombian exports has led to oversupply in Europe,
but only because the expected demand from China and India to
absorb the surplus has not yet materialised.
China has fairly high coal inventories and until they are
consumed, fresh spot buying is unlikely, traders supplying the
Chinese market said.
“While exports of U.S. coal may make some economic sense we
believe their impact will continue to be marginal,” Deutsche
Bank said in a research note on Friday.
“More important to the market balance, in our view, are the
short-term indicators of Chinese thermal coal demand which
continue to appear weak,” the note said.
“China is very slow right now, there was some buying a
couple of weeks ago, some high-ash Australian is getting in and
low-grade South African, but they’ve gone very quiet now,” one
trader said.
Continued…
