* Aug ARA trades at $89.25/T, Sept trades at $90/T
* Market uncertainties discourage short selling
LONDON, June 26 (Reuters) – Prompt European physical coal
prices rose by $1-2 U.S. dollars a tonne on Tuesday as the
market continued to look for clear direction.
Two European delivery DES ARA cargoes traded at $89.25 and
$90.00 a tonne, both bought by traders but prices have been
creeping higher during the past week, bid up by a European
utility.
“Fundamentally it’s looking very slightly stronger but
nobody wants to sell at the moment because there are just too
many variables which could move prices in the next few months,”
one European trader said.
Fresh spot demand in Europe remains minimal despite a strong
coal burn in key consumers Germany, Spain and the UK and
availability of high-quality thermal coal is tight and some
production cuts have already been made, which are
price-supporting factors.
There is also some expectation that oil will rebound back
above $100 and pull coal up with it, which is discouraging
players from selling coal short at present, traders said.
On the downside, there is a great deal of uncertainty about
China’s likely imports this year.
Analysts are forecasting strong imports for the year as a
whole, including the first-half buying spree which has inflated
inventories and clogged ports but the uncertainty stems from
signals that China’s economic growth could be slowing more than
anticipated.
Continued…
