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European coal outlook

Coal News - Published on Thu, 08 Nov 2018

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Montel reported European coal front-month prices slipped to three-month lows in early Monday trading, with further losses expected amid a weak competing gas market and slack physical trading activity. The API 2 front-month contract traded last down USD 1.10 from Friday’s close at USD 94.15/t – the lowest level since 8 August on a rolling basis – on Ice Futures. The front-year was USD 1.35 lower at USD 91.55/t. The market was in part taking direction from a sharp decrease in European gas prices, said an energy analyst with a UK-based industrial consumer. “The drop in gas might put some more efficient gas plants on the continent in the money [at the expense of coal-fired units],” he said.

The Dutch TTF front-quarter contract on Ice Endex fell to its lowest level since 10 August, in early trading, of EUR 23.83/MWh, with mild weather forecasts and ample supply pressuring the market.

Mr Tom Hovik, head of technical analyst at Montel, said the API 2 Cal 19 contract faced further losses this week, should it remain below last week’s mid-point level of USD 93.80/t.

Thin activity
Furthermore, on the physical market, a UK-based coal broker said trading activity in the Atlantic basin remained thin, in part due to high stocks at Amsterdam, Rotterdam and Antwerp (ARA) dry bulk terminals.

Combined stocks at four key ARA terminals were seen last at their highest levels since Montel began compiling the data, in late 2012, of more than 6.8m tonnes, as still low river levels in Germany continued to hamper barge shipments to inland coal-fired plants.

The broker said that “It’s tough for utilities to buy, as they can't bring coal into a port and discharge – they need to move stock first,” adding some vessels last week were redirected from the two largest coal hubs at Amsterdam and Rotterdam, to Antwerp.

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Posted By : Rabi Wangkhem on Thu, 08 Nov 2018
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