Euro Coal-Prices rise 50c/T on short-covering MyZA

LONDON, Jan 6 (Reuters) - Prompt physical coal prices
rose by 50-75 U.S. cents a tonne on Friday as players covered
short positions and Indian buying showed signs of picking up
after several months of a lull.	
    Traders and utilities in Europe short of Colombian tonnes
due to delays to shipments from two of the country's biggest
exporters, Drummond and Prodeco, have been seeking replacement
cargoes, helping to bolster DES ARA prices.	
    The gap between South African physical prices and API4 coal
swaps has narrowed substantially, enough to tempt Indian trade
buyers back into the market, suppliers said.	
    South African coal supply for January is extremely tight,
exporters, traders and utilities said.	
    Almost nothing is available now for January and shrinking
volumes for February, they said.	
    A bid for 300,000 tonnes or two capesize cargoes worth, of
February loading South African coal at $107.00 was on screen
trading platform globalCOAL on Friday, against an offer of one
75,000 tonne cargo.	
    The unusually high size of this prompt bid - a bid or offer
for more than a cape's worth is almost unheard of - versus the
offer for only part of the tonnage sought is the best visible
indicator of the market's tightening, they said.	
    Indian cement and sponge iron makers have this week bought
several prompt South African cargoes and are seeking more, but
the power sector is still squeezed between fixed electricity
tariffs, strong coal prices and the weak rupee.	
    "Every rupee, every paisa counts for the consumers, even
more now than before they want the lowest prices and they are
looking at a variety of coals, South African, Australian,
American," one major Indian trade buyer said.	
    "Last year there was a marked lack of Indian spot demand due
to the disconnection between swaps and physical but now there's
not much of a gap, just a small premium and the buyers are more
comfortable, don't feel too exposed," a major coal exporter to
India said.	
    India's demand for South African coal remained robust
throughout 2011 but the vast majority of cargoes shipped were
sold under index-linked, term contracts rather than spot, a
trend which sucked liquidity from the spot market last year.	
    India took just over 16 million tonnes from South Africa in
2011, closely followed by China which imported 13.2 million
tonnes after a Q4 surge in buying.	
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^	
    GRAPHIC: South African coal exports monthly: r.reuters.com/byx89r	
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^	
    While total South African exports for the calendar year were
little changed at 64.6 million tonnes, up from 63.4 in 2010, the
final total was several million tonnes higher than many
producers had forecast at this time last year.	
    South African rail operator Transnet Freight Rail showed a
marked increase in performance in the second half of the year,
leaving exporters with more spot coal to sell than they ever
expected, coal which was absorbed by China.	
    Chinese buyers are likely to remain sidelined until after
the end-January New Year holidays, having built up stockpiles in
November and December, exporters said.	
    "Everybody knows the Chinese stockpile ahead of the New Year
and they bought a huge amount this past quarter but you can't
make any more assumptions from that about how much they'll buy,
the time to gauge the market is after their New Year," one
exporter said.	
   	
   TRADES  	
   Two March delivery DES ARA cargoes traded at $110.00 and
$110.50 on globalCOAL.	
         	
  PRICES    	
   A February cargo was bid at $107.00 and offered at $108.00,
up 50-75 cents on the bid.	
    A March South African cargo was bid at $107.00 and offered
at $107.25, also up around 50 cents. 	
   A February DES ARA cargo was bid at $109.00 and offered at
$111.50, up 50 cents.	
	
 (Reporting by Jacqueline Cowhig; editing by James Jukwey)