* Brent dips below $90, coal swaps follow
* Traders stop speculative shipments to China
LONDON, June 25 (Reuters) – Prompt physical coal prices were
unchanged on Monday although swaps slipped by around 50 U.S.
cents in line with oil’s fall but no fresh trades were reported
and few bids or offers were seen.
Brent crude briefly fell below $90 on Monday with concerns
abut faltering global growth and Europe’s debt crisis hitting
investor confidence.
When coal trading activity is especially thin, the market
tends to drift with oil until it finds its own direction.
The short-term outlook remains fairly bearish despite an
increase in Indian prompt buying and trader short-covering.
Traders waited to see who will cut output, when and by how
much, at the same time as watching for signs of robust Chinese
demand for the summer and beyond.
Until sufficient output cuts are made and U.S., Colombian and
Russian cargoes in traders’ hands are absorbed, the market will
be vulnerable and could drift back to recent two-year lows, they
said.
Production cuts have begun to be made in the U.S., Russia
and Indonesia but could take a few months to be felt in stronger
prices which in turn would reduce a repeat of the widespread
price re-negotiation by Chinese buyers which spooked the market
last month.
Continued…
