* March ARA U.S. cargo trades at $98/T
* Freeze tests gas, power networks to limit
LONDON Feb 8 (Reuters) – Blizzards and ice-laden
power lines pushed gas and electricity networks close to
breaking point on Wednesday but fundamental coal oversupply
drove coal prices lower.
“The cold weather is not having any impact on coal because
there’s too much of it everywhere and a lot of U.S. coal being
offered which has to be heavily discounted,” one European trader
said.
U.S. coal producer Arch, a new player on screen
trading platform globalCOAL, on Wednesday sold a March delivery
cargo at $98.00 a tonne – $4.00 below equivalent API2 swaps – a
bearish signal, traders said.
A February delivery DES ARA cargo was bid at $92.00, down
steeply from Tuesday’s last trade at $97.50.
South African FOB Richards Bay prices have also weakened
reflecting a loosening in the tight supply seen throughout
January, they said.
“Coal prices in Europe could well remain under pressure
given the macroeconomic risks stemming from the ongoing
sovereign debt issues,” Barclays Capital said in a research
note. “Although deeply cold early February temperatures should
start to deplete inventories and lead to some restocking.”
Chinese spot buying has yet to take off now that the Lunar
New Year holidays are over, and probably will not for another
two or three weeks at least, producers and traders supplying the
Chinese market said.
Continued…
