(Adds background, Portugal’s likely coal consumption)
LONDON, April 20 (Reuters) – Portuguese utility Carbopego is
expected to buy Colombian or U.S. coal when it awards its
recently issued tender next week, traders said.
Carbopego tendered for two cargoes of thermal coal to meet
its standard specifications, for delivery in June and August,
traders said.
June DES ARA physical coal has been trading at around $95
to$96 a tonne this week. Carbopego is set to award at prices
close to this level, traders said.
Very high-sulphur U.S. coal of over 1.5 percent to 3 percent
cannot be used by Carbopego, which has no blending facilities
and prefers to burn straight from its stockpiles.
But the utility has for years taken Colombian and South
African coal, mostly direct from producers.
Colombian coal and U.S. material with more than 1.25 percent
sulphur have been the cheapest coal origins delivered into
Europe for many months.
Producers and an increasing number of trader sellers have
scoured the globe for demand niches in which to place cargoes
not wanted by oversupplied Europe. Cargoes have been sold in the
past month to Pakistan, Turkey and Israel in addition to the
growth markets of China and India.
Portugal and Spain are among the few hot spots of strong
coal demand in Europe because of expensive gas and low hydro and
this is likely to continue through this year, utility sources
said.
Portugal is expected to burn 1.5-1.6 million tonnes of
imported coal this year, slightly higher than last year’s level.
Carbopego has already bought baseload coal supply for this
year but may return to the market for a few more spot cargoes in
the autumn.
(Reporting by Jacqueline Cowhig, editing by Jane Baird and
Hans-Juergen Peters)
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