LONDON Nov 8 (Reuters) – European coal prices remained firm
on Thursday as utilities in its biggest power markets prepared
for a tight winter electricity market that would require
increased burn of coal stocks, analysts said.
Coal prices for delivery in January with destination
Amsterdam/Rotterdam/Antwerp (DES ARA) traded at $88 a tonne at
1500 GMT, on par with the previous day.
South African cargoes for delivery in December did not
trade, but the bid/offer range of $79.50 at $82 per tonne was
slightly higher than on Wednesday.
Analysts said that the firm prices were a result of European
utilities preparing for a tight winter power market.
“There were a couple of reports today that Europe’s winter
power outlook could be tight even if the weather remains mild,
and because gas-fired electricity production is not profitable
in Europe that means that utilities will have to burn more coal,
lifting demand,” one utility analyst said.
The outlook for European power supplies appear tighter this
winter due to hitches in Belgian nuclear reactors and after
Germany stopped some reactors in 2011, according to preliminary
findings of a European study cited by French power grid RTE.
In Germany, the power regulator said on Thursday that it was
signing up reserve power capacity to prevent a potential supply
squeeze in case of a cold-snap.
Coal is the preferred fossil-fuel for electricity generation
in Europe in terms of profitability, enjoying a 20 euros
($25.51) per megawatt-hour (MWh) premium over gas power
production in Germany and a 16 pounds ($25.58) premium over gas
in Britain.
In the coal futures market, the API2 2013 coal swaps
contract rose to $95 a tonne, up a dollar since Wednesday
afternoon.
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