* March S.African trades at $96/T
* May DES ARA trades at $98/T
LONDON Feb 29 (Reuters) – Prompt physical coal prices
fell for the second day running by $1.00 a tonne, pressured by
oversupply and weak gas prices.
The same factors have been pushing prices lower, gradually,
for the past three months, utilities and traders said.
The flow of U.S. coal into Europe, the impact of the warmest
European winter for 30 years, weak gas prices and key Asian
buyers such as China largely staying out of the spot market,
have combined to tip the market into oversupply, they said.
“A March DES ARA cargo traded at $96 and a May at $98, both
down by $1.00, the front months are looking weak,” one utility
source said.
“Oversupply in ARA is bleeding through to prompt prices but
Richards Bay is surprisingly steady given that South African
doesn’t price in competitively anywhere,” one trader said.
U.S. coal with a high-sulphur content of over 3 percent is
currently being offered at a $20 a tonne discount to API2,
equating to around $79 a tonne DES ARA, traders said.
If more European end-users could use or blend this coal they
would, but their stockpiles are close to full. Instead, Indian
traders are looking to bring in this coal as an alternative to
South African for the cement sector.
Continued…
