* Utilities, traders buy prompt ARA, sell forward
* Indian cement firms buy Illinois coal to replace petcoke
* S.African prices remain close to 18-mth lows
* ARA prices hover just above 2-year lows
LONDON, May 3 (Reuters) – European coal prices stabilised on
Thursday as two-year low levels earlier in the week led to some
fresh buying by utilities and traders.
Prompt South African prices recovered slightly, having
traded on Wednesday at the lowest level since October 2010 at
$97.00 FOB Richards Bay.
“Recently, every time there’s been heavy selling and prices
drop, it’s been the front months which have taken the hammering,
which has just deepened the contango and encouraged people to
buy prompt and hold it,” one European trader said.
The short-term trend is still for weaker prices over the
next few months, with pauses from time to time as just enough
buying emerges to put a temporary floor under prices before the
slide starts again, utilities and traders said.
Prices in the second half of the year will depend upon how
much China and India import, and although the forecasts are
mostly bullish, India has historically failed to import enough
coal to bridge the gulf between domestic supply and demand.
Continued…
