* Coal accounted for 46 pct of Q1 UK generation
* China seen buying while prices are low – analysts
LONDON May 31 (Reuters) – European prompt physical coal
prices dipped by around 50 U.S. cents a tonne on Thursday while
the market continued to seek clear direction on the short-term
outlook.
Stockpiles remained high in Amsterdam-Rotterdam-Antwerp,
Europe’s main import hub despite strong consumption in Germany,
the UK and Spain.
Coal accounted for 46 percent of Britain’s power production
in Q1, a six-year high share, the UK Energy Ministry said on
Thursday, because coal has been far cheaper a fuel than gas for
the past several months.
But utility buying of prompt coal has been minimal and
usually only when it has been possible to buy cheap nearby
cargoes and sell forward, utilities said.
“Macro factors look bearish for the end of the year and
beyond and that’s pulled down forward prices by around $1.00
with less of a fall in prompt prices,” one utility source said.
But the main price-driver and focus of the market’s
attention and concern remains China and to a lesser extent,
India.
Even Chinese counterparties until now regarded as first
class and unlikely to break contracts have been insisting on
re-negotiating contracts agreed at higher prices, suppliers
said.
Continued…
