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By Jacqueline Cowhig
LONDON Oct 24 (Reuters) – South African prompt physical
coal prices fell by $2.60 a tonne to the lowest since late
December 2009 on Wednesday, extending a month-long decline, with
a trade at $77.00 for a November cargo, traders said.
After the $77 trade, another November cargo was bid at $77
and offered at $78.50 a tonne FOB.
Oil fell by more than $1 a barrel on Wednesday after U.S.
crude inventories rose by 5.9 million barrels last week, more
than analyst expectations, a factor which helped drag coal lower
.
But sluggish demand and continued physical oversupply were
the main reason’s behind coal’s fall to fresh lows, traders and
utilities said.
Tepid spot demand in India and China, two of the biggest
buyers of South African material on a spot basis, and abundant
availability of cheaper coal from other countries have weighed
on prices during the past month.
Prices have fallen from over $100 a tonne FOB Richards Bay
in Q2 and have further to fall unless demand revives.
“There is still a lot of Q4 South African in traders’ hands
and it just doesn’t price in competitively in most markets,” one
trader said.
Continued…
