* October DES ARA cargo trades at $94/mt
* Price floor seen around $90/mt
LONDON Aug 23 (Reuters) – Physical prompt coal prices
continued this week’s downward trend on Thursday as prospects
for rising Colombian exports and weak European demand pulled
down the market, traders said.
A Colombian rail strike led to a supply squeeze in the
Atlantic basin early in August, but analysts said the seaborne
Atlantic coal market would return to a surplus by the end of
August as Colombia ramps up exports.
“The return of Colombian exports is colliding with ongoing
weakness in European demand, so prices are going down every day
as long as Colombian exports are going up,” one coal trader
said. “But this trend will stop soon, once Colombian exports are
back to normal at some point next week.”
Traders also said European coal prices would bottom out soon
as further price drops would knock out some production.
“Once we see DES ARA prompt prices approach $90 a tonne,
some production will halt as they can’t send their coal to
Europe at a profit under that level, and once these supplies go
off, prices will lift,” one coal importer said.
A DES ARA cargo for delivery in October was traded at $94
per tonne on the GLOBALcoal trading platform. November was
offered at $94.25, down almost $3 a tonne from Wednesday.
South African Richards Bay cargoes for delivery in September
saw a bid/offer range of $79 to $86.75 a tonne, and October
shipments saw a bid/offer spread of $85 to $88.50 per tonne, one
dollar less than the previous day.
November shipments were offered at $89.85 a tonne, with no
bids reported.
(Reporting by Henning Gloystein; Editing by David Holmes)
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