update released, page-16

Hi hope2008

I came across this article. I thought it might be a good idea to post the below for people's consumption.

It pretty much tells us that there is more supply then demand ATM..

Good read though( hairy I'm expecting a response)



Euro Coal-Prices rise but near-term still looks grim

Fri Jun 22, 2012 12:48pm EDT

* Aug ARA trades at $87.70

* Russia, Indonesia start to trim output

* Macquarie cuts 2012 coal price forecasts

LONDON, June 22 (Reuters) - Prompt physical coal prices shot up by over $1.50 a tonne on Friday, bid higher on both swaps and physical led by a European utility, but the outlook during the summer remains grim, traders and utilities said.

"Almost everywhere looks bearish from a macro perspective, almost every origin of coal is close to pricing-in to Europe but coal prices went up sharply today," one utility said.

Until sufficient output cuts are made and U.S., Colombian and Russian cargoes in traders' hands are absorbed, the market will be vulnerable and could drift back to recent two-year lows, they said.

A lack of demand broadly speaking, has not been the problem.

Rather, the combination of an unexpectedly-high level of U.S. exports, driven by the collapse of domestic demand, and the shock impact of the fall in Chinese power use and high inventories.

"There are over 9 million tonnes in inventories in Qinhuangdao (China's northern port from which coal is moved in vast quantities to the energy hungry south), and usually the normal level is 6 million, plus high inventories in southern ports," one producer said.

"But as soon as there is some space at a port, they are buying again," he added.

Some coal producers are already cutting output in the U.S., Indonesia and Russia but it may take a few months or even until 2013 for the effects to be felt fully in prices, producers and traders said.

The usual, seasonal rise in European demand for Q4 is expected to materialise but what has spooked the market recently has been China's widespread price re-negotiations while still importing more coal than a year earlier.

"We have revised our seaborne thermal coal prices lower for the remainder of 2012, with the oversupply plaguing markets at present likely to be resolved by production cuts and somewhat better seasonal demand coming into Q4 2012," Macquarie Capital (Europe) said in a research note.

"We think it is too early to call a bottom in prices given the overstocked situation in China in particular, with the stalling of power generation in April the surprise which has caused us to change our forecasts," Macquarie said.

Macquarie is forecasting average physical Newcastle prices for 2012 at $102.30 a tonne FOB, down 6 percent from its previous forecast. It is forecasting average South African prices of $96.80 a tonne FOB Richards Bay, down 7.6 percent from its previous figure.

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GRAPHIC: DES ARA physical coal prices: here

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TRADES

An August delivery DES ARA cargo of Colombian coal to Rotterdam traded at $87.70 a tonne on globalCOAL.

PRICES A July loading South African cargo was bid at $85.00 for 150,000 tonnes, up over $2.00 from Thursday.

An August South African cargo was offered at $88.00, up over $1.00.

An August DES ARA cargo was bid at $87.70, up 50 cents and offered at $90.50.











http://www.reuters.com/article/2012/06/22/markets-coal-physical-idUSL5E8HM96Y20120622