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European Coal Prices Likely Reached Their Floor this Year

Coal News - Published on Tue, 23 Jul 2019

Image Source: Montel
German importers told Montel European coal prices have likely reached their floor this year, though they may stay weak for some time before entering an uptrend. Mr Franz-Josef Wodopia, managing director of the German coal importers’ association, said “We won’t see a return to prices in the USD 40s per tonne. I think that was the bottom. But prices in the 50s and 60s should be expected for the rest of the year.”

Rystad Energy said that an oversupply in the world’s production of LNG had seen deliveries to Europe more than double to 40 million tonnes over the first six months of the year.

According to Fraunhofer ISE data, with gas prices in Europe down by half, coal generators had been priced out of the market, slashing hard coal-fired power generation in Europe’s biggest economy by 24% over the first half of the year.

Mr Wolfgang Cieslik, a board member of German utility Steag, sid “Add to this carbon costs approaching a record EUR 30 per tonne and the present constellation of gas, hard coal and emissions prices would lead to at least a partial market shake-out of German power plants.”

Broker Global Coal’s benchmark DES ARA index of European coal prices was last seen at USD 59.35 per tonne, down 31% since the start of 2019. Last month it hit a 3 year low of USD 48 per tonne. The coal market has come under pressure from cheap gas that has made the fuel more competitive as a form of power generation this year.

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Posted By : Rabi Wangkhem on Tue, 23 Jul 2019
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