* Nov S.African bid at $84.50/T, up $1.00
* Swaps rally bolsters physical
LONDON, Sept 27 (Reuters) – Prompt coal prices rose by
around $1.00 a tonne on Thursday, boosted by oil’s rally to $112
and active coal swaps buying which pulled physical values
higher.
“Oil rose strongly in the morning, that pushed everything
else up, but the fundamentals haven’t changed,” one European
trader said.
Players were buying coal swaps to protect their hedged
positions rather than because of a new bullishness, traders
said, and the market’s overall outlook for the balance of the
year remains bearish.
Indian spot demand has been slow to revive after the hiatus
of the June-September monsoon season, while Chinese importers
are seeking primarily low-grade material at discounted rates,
and that in limited quantity.
Supply has reduced. Few U.S. high-sulphur spot cargoes are
being offered because sellers would make a sizeable loss if they
sold panamax cargoes into Europe at current delivered prices of
under $90 a tonne.
Cuts are being made at mines in Indonesia, Australia, Russia
and the United States but the effect is not being felt yet due
to tepid spot demand.
U.S. utilities are starting, in a limited way, to use more
coal because natural gas prices have been rising, which could
keep some U.S. coal in the domestic market but not enough to
make a sizeable difference, utility buyers said.
Continued…
