* Physical to swaps discount widens to $3/T
* Oil holds firm at $112, bolstering coal, metals, oil
LONDON, Sept 28 (Reuters) - Prompt physical coal prices rose
by around 25 U.S. cents to $1.00 a tonne but coal swaps rallied
more strongly on oil's move above $112 a barrel and improved
macro sentiment.
Oil held firm above $112 on Friday after plans for Spanish
economic reform eased investor concerns over Europe's debt
crisis.
Improved sentiment lifted oil, base metals and gold in early
trading on Friday, pulling coal up too.
No fresh trades were reported for delivered Europe or FOB
Richards Bay cargoes and key buyers in India and China remain
largely sidelined.
Despite unusually strong coal consumption in some European
countries, oversupply will keep coal prices rangebound and below
$100 a tonne for many months, utilities and analysts said.
Coal physical prices hit a two-year low of $81.65 a tonne
FOB Richards Bay in June and have since moved into a new,
slightly higher range which is unlikely to change in the
near-term.
Coal swaps reacted more strongly to the lift in other
markets than physical coal prices, widening the discount of
physical to paper to as much as $3.00 a tonne from around $2.00
a week ago.
When the difference between physical and swaps values
becomes too wide for players' comfort, liquidity tends to
shrivel and fewer trades take place.
PRICES
An October delivery DES ARA cargo was bid at $85.00 with no
offer.
A November DES ARA cargo was bid at $87.00 and offered at
$87.50, up around 25 cents.
A December DES ARA cargo was bid at $88.50 and offered at
$89.25, slightly lower.
November South African cargo was bid at $85.25 and offered at
$86.25, up around $1.25.
A December South African cargo was bid at $88.50 and offered
at $89.25, also up around $1.00.
(Reporting by Jacqueline Cowhig; Editing by Catherine Evans)
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