(Montel) European coal prices are likely to remain supported this week, with appreciating producer currencies deterring offers and a still open trans-Pacific arbitrage resulting in a slight decline in Atlantic supply, participants said on Monday.
The Cal 17 API 2 contract last traded on Ice at USD 44.30/t, up USD 0.61, and 6% higher week on week.
On the physical market, a May-loading 50,000t cargo of generic origin traded via broker Global Coal at USD 47/t, up USD 1 from the previous such trade, concluded last Thursday.
The rise in part reflected the impact of appreciating Russian and Colombian currencies against the US dollar, said Diana Bacila, senior analyst at Oslo-based energy consultancy Nena.
A stronger domestic currency makes dollar-linked coal sales somewhat less attractive, due in part to the relative rise in domestic production costs.
The ruble was last seen at 67.7 against the dollar, while the Colombian peso was at 2,998.
Asia exports
“At the same time, even though European coal demand is [seasonally] fading, there have been a number of Colombian sales to India and South Korea, which has tightened the Atlantic balance,” Bacila said.
“Colombia has been helped massively through the last 12-18 months by the [weak] currency against the US dollar, and the Colombia-to-Asia trade is still just about working,” said a London-based coal broker, noting around 1m tonnes had been sold trans-Pacific so far this year.
Russian suppliers may be taking advantage of the shortfall in Colombian spot offers, in order to push up prices, with Russia-origin cargoes offered at higher levels in recent sessions, he said.
A commodities analyst with a European trading house also cited Colombian shipments to Asia as a supportive factor, noting, however, any reduction in Russian exports had yet to be reflected in export data.
Russian coal exports rose 5.2% year on year to 37.5m tonnes in the first quarter, Montel reported earlier this month.
Meanwhile, combined coal stocks at four key north-west European dry bulk terminals fell their lowest since Montel began gathering the data in December 2012 – at 3.78m tonnes (see Stocks section).
Prices & Spreads
|
Coal prices
|
Latest deal
|
Previous close
|
Previous week’s close
|
|
API 2 Q3 2016
|
n/a
|
USD 46.10/t
|
USD 43.60/t
|
|
API 2 Cal 17
|
USD 44.30/t
|
USD 43.69/t
|
USD 41.30/t
|
|
Global Coal DES ARA Index
|
USD 46.46/t
|
USD 45/t
|
|
Spreads & BDI
|
Latest assessment
|
Previous week
|
|
German clean dark spread (Cal-17)*
|
EUR 0.12/MWh
|
EUR -0.30/MWh
|
|
German clean spark spread (Cal-17)*
|
EUR –6.76/MWh
|
EUR -7.60/MWh
|
|
Baltic Dry Index (BDI)
|
635 points
|
539 points
|
*Montel assessments
Stocks
European port coal stock levels as of 18 April, obtained by Montel from the respective terminals (against previous week):
EMO (Rotterdam) – 1.6m tonnes (-0.1m tonnes)
OBA (Amsterdam) – 1.35m tonnes (unchanged)
EBS (Rotterdam) – 0.5m tonnes (+0.075m tonnes)
Ovet Vlissingen/Flushing – 0.33m tonnes (-0.02m tonnes), combined thermal and coking
Ovet Terneuzen – 0.17m tonnes (unchanged), comprising petcoke, anthracite and coke
Reporting by:
Laurence Walker
laurence@montel.no
14:36, Monday, 18 April 2016