* Nov S.African trades at $84/T
* Oct DES ARA trades at $84.75/T
LONDON, Sept 25 (Reuters) - Prompt coal prices recovered
slightly from Monday's losses, bolstered by oil's rise to around
$111 a barrel but few trades were reported.
There is continued pressure on prompt South African coal
prices because key spot buyers in India and China have largely
retreated, waiting for prices to fall further.
Although the market is less oversupplied than it was a few
months ago and the record exports of high-sulphur U.S. coal
which were primarily responsible for the market touching
two-year lows in June have shrunk, it is not yet in balance.
Some end-users in Europe who blend U.S. coal with cheaper,
lower volatile fuel have paid small premiums over the API2 price
benchmark for panamax cargos but not enough to suggest that U.S.
exports will flow next year at the same level as in 2012.
"Oil rallied today and coal followed to some extent but
there is still a lot of coal around," one European trader said.
At delivered Europe prices of around $90 a tonne, prices are
hovering around the marginal costs of the highest-cost exporters
- Russia and the United States, Barclays Capital said in a
research note on Tuesday.
While production cuts are likely to limit potential downside
for prices, "the inventory builds and modest Pacific demand
suggest limited upside, barring a significant weather or
supply-side event," BarCap said.
BarCap has lowered its price forcasts for DES ARA and
Richards Bay prices by 1-3 percent, expecting both to trade
around a $90/T mean due to the impact of a slowdown in Chinese
growth and high Chinese coal inventories.
TRADES
A November loading South African cargo traded at $84.00 a
tonne FOB Richards Bay, up around 50 cents.
An October delivery DES ARA cargo traded at $84.75/T, also
up around 50 cents.
(Reporting by Jacqueline Cowhig; Editing by Catherine Evans)
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