* June ARA trades at $95.75/T
* Few trades done at Beijing coal conference
LONDON, April 18 (Reuters) – European physical coal prices
slipped by around $1.00 for the fourth successive day on
Wednesday, pressured by oversupply and despite the strengh of
gas in Europe, utilities and traders said.
May and June API4 swaps – which settle against South African
physical prices – traded at $100 earlier on Wednesday, a fall of
which pulled physical bids down to the same level although no
fresh trades were reported.
The DES ARA market showed a sharper fall – June DES ARA
traded at $95.75, down $1.50 from the previous day’s last trade.
Looking purely at the margins to be made in generating power
from different fuels, coal is more economic in Europe currently
than gas but while the coal burn remains fairly healthy,
utilities say they are unlikely to need to buy more than minimal
tonnages for Q4.
Utilities and traders are still sitting on large inventories
in ARA and at power plants with more coal due to flow in under
term contract which should cover their winter needs.
“Utilities are all full already for this year, the problem
is having too much coal,” one utility source said.
Coal can be stored for several months to a year or more if
it is properly compacted and the stockpiles are managed but the
cost of carrying inventory plus the cost of maintaining it and
moving it off stockpile, when added together, is less than the
slim contango between Q2 and Q4, they said.
Continued…
