* More index trades, less fixed price expected
* Coal may disconnect again from oil
LONDON Feb 23 (Reuters) – Prompt physical coal prices
were little changed on Thursday on muted trading activity, and
bid-offer spreads for fixed price cargoes widened by around $1,
too far apart for trades to seem likely, utilities and traders
said.
“The market’s moved sideways, if anything, just looking at
the wider spreads,” one trader said.
Brent crude futures held on to gains, but U.S. crude dropped
slightly after a government report showed a higher-than-expected
rise in stocks.
Oil at over $100 a barrel is providing structural support to
coal prices, traders and analysts said, although there are
spells when coal disconnects from oil and moves more on
fundamentals.
With China – far and away the biggest spot market price
driver – still out of the market and unlikely to return for
another several weeks, fundamentals are seen likely to erode
current prices by a few dollars at least.
Chinese imports surged in the fourth-quarter, but lower
domestic prices have left large stockpiles of imported coal at
ports and plants, which need to be reduced before buying
resumes.
“Trade tends to dry up towards the end of the month for
fixed-price business, but you’ll probably see some index deals
in the next week,” a European utility said.
Continued…
