* Richards Bay September bid at $83.75/mt
* Atlantic oversupply to remain in place until 2017
LONDON Aug 24 (Reuters) – Physical prompt coal prices saw
little movement in Europe on Friday, ahead of a long weekend in
Britain, and the market remained subdued as a result of rising
Colombian output and weak demand from the region’s sluggish
economy.
Traders said production in Colombia, where a rail strike led
to a supply squeeze in earlier in August, was continuing to rise
and was expected to reach normal output again by the end of next
week, resulting the seaborne Atlantic coal market returning into
surplus.
Analysts said that the supply surplus was expected to
persist in coming years.
“We see very few adjustments supporting a more positive
price outlook over the 2013-2017 period, over which we model an
increasing surplus,” Deutsche Bank said in a research note on
Friday.
The downward price pressure this surplus has created is
being emphasised by weakening Chinese demand.
Australian thermal coal prices fell toward $91 a tonne this
week on sluggish sales as buyers from China, the world’s top
consumer, remained on the sidelines while slowly digesting
stocks at home, trade sources said.
Despite the downward momentum, traders said European coal
prices would bottom out soon as further price drops would knock
out some production.
“Once we see DES ARA prompt prices approach $90 a tonne,
some production will halt as they can’t send their coal to
Europe at a profit under that level, and once these supplies go
off, prices will lift,” one coal importer said.
No trades were heard on Friday but South African Richards
Bay cargoes for delivery in September were bid at $83.75 per
tonne on the GLOBALcoal trading platform. November shipments
were bid at $87 a tonne.
(Reporting by Henning Gloystein; Editing by Anthony Barker)
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