* China cargoes re-sold to Asia, Mediterranean -trade
* Supply cuts needed to firm prices -analysts
LONDON, June 1 (Reuters) – European prompt physical coal
prices steadied on Friday after slipping for most of the week,
while many players were sidelined ahead of a UK public holiday
and after most cargoes re-priced into China or re-sold elsewhere
were absorbed, traders and utilities said.
No fresh trades were reported, and few bids or offers were
seen.
“It looks as if prices have almost found a bottom. We don’t
think they’ll fall much further from current levels,” one
utility said.
“The ARA cargoes which traded at $3 below the index, were
originally for China, and others have been absorbed elsewhere in
Asia, in the Mediterranean, into Turkey,” he added.
Fresh buying by Chinese utilities and trader importers has
encouraged hope of continued strong imports by China, although
traders said it was too early to tell whether this would be
enough to absorb the global surplus, especially given the gloomy
euro zone economic outlook.
Although Chinese re-negotiation of spot contract prices is
likely to continue for the next couple of months as the last
high-priced cargoes become due for shipment, a market panic two
weeks ago that a slowdown in Chinese growth spelled doom for
coal prices seems to have eased.
“Although stronger growth in H2 (look for 8-9 percent) will
be a positive for commodity demand, it is unlikely to be
sufficient to push prices materially higher in the near term,
given continued euro headwinds,” Credit Suisse said in a
research note on Friday.
Continued…
