* Banks, traders, some utilities stockpile
* Russian Apr ARA trades at $95/T
LONDON, March 6 (Reuters) – Prompt physical coal
prices held fairly steady on Tuesday, dropping by only 20 cents
a tonne on Tuesday despite continued tepid buying interest in
Europe and a steep fall earlier in the day in oil prices.
A prompt Russian cargo traded at $95.00 a tonne DES ARA on
Tuesday, a price which was seen as aggressively low by some
players and indicative of further weakeness to come. Russian
high-quality coal can trade at a premium to generic South
African or Colombian material.
South African FOB prices also dipped slightly by around 20
cents, but renewed Indian buying interest could give these
prices some support, suppliers said.
A few of the bigger utilities still burdened by huge
stockpiles after the recent warm winter have continued to shed
unwanted cargoes but are now finding buyers among firms willing
to store and carry the coal until Q4 to benefit from the $12
contango, utilities and traders said.
For the most part, stockpiling is an accidental consequence
of the hangover of coal from last year and the contango is a
mitigating factor, utilities said.
But banks as well as traders and generators have been buyers
this week for that purpose.
With spot ARA coal trading at $95.00 a tonne, down from over
$120 in October and likely to fall further in the short-term,
more stockpiling is likely – although the scarcity of stocking
space at terminals will limit this, they said.
Continued…
