* May S. African cargo trades at $103/T FOB
* Newcastle prompt prices dip to $104.25/T
LONDON, March 13 (Reuters) – Prompt physical coal
prices dropped slightly on Tuesday in line with weaker gas, with
few fresh trades seen.
The fundamentals for coal in the Atlantic look weak, traders
and utilities said, but the market is being driven more by moves
in gas and oil prices than the lack of physical demand, which
has trimmed 15 percent from coal prices since October.
“Coal this week has been looking at anything but its own
weak fundamentals, sometimes following oil and gas or the warmer
weather,” one utility source said.
The flow of U.S. and Colombian coal into Europe has
continued unabated, and consumers and suppliers are busily
re-selling cargoes wherever they can – into the Mediterranean,
into Asia.
Pacific FOB prices have fallen sharply by over $15 during
the past three weeks to just over $100 a tonne FOB Newcastle.
Australian producers immersed in the annual Japanese term
contract talks are likely to achieve prices close to $120,
despite the recent fall in spot values, because Japan needs a
baseload of standard, high-grade coal for power generation,
utility sources said.
“Japan doesn’t buy cheap, sub-specification coal,” one
source said.
Continued…
