* Jly ARA bid at $83/T, down $3 but no trades reported
* High China inventories, delayed discharging seen
LONDON, June 7 (Reuters) – European prompt physical coal
prices dropped by around $1 a tonne for a second day running,
touching the two-year low of $85.00 reached in May, on
expectations for more delays and price renegotiations by Chinese
buyers in coming weeks.
A July delivery DES ARA cargo was bid at $83.00 and offered
at $85.00 a tonne, down $3.00 on the offer from Wednesday’s
level.
Demand in Europe has been so minimal that neither utilities
nor traders for the most part, need or want to buy prompt
cargoes at present, they said.
Active buying of API2 coal swaps by U.S. coal firms gave
prices some support in early trading, but physical prices
ignored swaps and slipped, with no fresh trades reported.
The absence this week of some of the market’s most active
traders also hampered liquidity, they said.
Inventories have been high at Chinese ports, causing
continued delays to vessels being discharged and hydro reservoir
levels are high, which could trim the need for coal-fired power
during the summer season of peak air-conditioning demand,
suppliers said.
“This is China, this is not new. All these problems and
games have been seen before whenever the price crashes,” said
one trader with a prompt cargo of South African coal destined
for China.
Continued…
