Nena News

END OF DAY – Coal extends 2-month highs

(Montel) European coal prices jumped across the curve on Monday and extended last Friday’s two-month highs amid supportive technical signals, restocking demand, potential supply disruptions and geopolitical risks in the Middle East lifting sentiment.

The API 2 front-quarter contract was last seen up USD 0.80 to USD 85.85/t, while the Cal 19 gained USD 1.04 to USD 82.80/t, both at their highest since 23 February, on Ice Futures.

The bullish influence was “mostly coming from the oil” market and was “related to geopolitical issues” in the Middle East, said Diana Bacila, senior analyst at Oslo-based Nena.

The front-month contract for Brent crude North Sea Brent oil traded last down USD 0.60 at USD 71.98/bbl, somewhat below Wednesday’s intraday peak of USD 73.09/bbl, as expectations of expanding oil production in the US offset ongoing tensions in the Middle East following US air strikes against Syria.

Coal prices in the Atlantic basin could also be affected by additional bullish drivers, said Bacila.

“[The weather] has been colder in February and March, so coal stocks have been depleted in coal plants. [That] could lead to a wave of restocking,” she added.

European port coal stock levels at the main bulk terminals remained around 4m tonnes, more than 20% lower year on year.

Moreover, the April-May rainy session in Colombia “could disrupt exports” to Europe, said Bacila.

“This could be one reason why we see the support in the Atlantic [basin].”

The Newcastle front-quarter contract traded last USD 0.60 down to USD 91.75/t.

CO2 highs
In the European carbon market, prices hit a new multi-year high, with compliance buying and option hedging activity driving the market upwards, Montel reported earlier.

The benchmark Dec 18 contract was last seen EUR 0.16 higher at EUR 14.10/t, after reaching EUR 14.22/t earlier, the highest intraday price for a front-year contract since 23 June 2011.

In the gas markets, UK day-ahead prices dropped 0.20p to 51p/th on weaker demand expected.

The equivalent Dutch TTF contract was EUR 0.13 lower at EUR 19.85/MWh, at one broker.
 

Reporting by:
Pablo Bronte
pablo@montel.no
16:07, Monday, 16 April 2018