stem coal prices surge to highest levels in 20

It is reported that prompt FOB Newcastle and DES ARA coal prices rose by USD 2 per tonne to USD 4 per tonne to hit the highest levels seen since January on last Thursday on China physical demand, the U.S. dollar's weakness and the general surge of money into commodity markets.

A February loading South African cargo traded at USD 104.5 up by USD 3 from Wednesday.

A December loading South African cargo traded at USD 105 a tonne up by USD 4 from Wednesday's bid level.

A January delivery DES ARA cargo traded at USD 106.5 a tonne up by USD 2.25 from Wednesday.

A February and two January loading Australian cargoes traded at USD 110.00 FOB Newcastle up by USD 2 from Wednesday.

A December DES ARA cargo was bid at USD 106.5 a tonne up by USD 2.25 from Wednesday.

A January cargo was bid at USD 106.25 and offered at USD 106.75 up USD 1.25 on the bid.

A December loading South African cargo was bid at USD 104 and offered at USD 105 up by USD 4.

A January South African cargo was bid at USD 105 and offered at USD 105.75 up by nearly USD 4 on the bid.

Analysts have had to revise coal price forecasts made only a month ago because the price rises projected for mid 2011 have already been achieved.

Chinese buyers are seeking South African and Indonesian prompt cargoes to build stockpiles sufficient to supply power through an unusually cold winter and this is drawing tonnage away from Europe and cutting spot availability to India. The overall scenario is one of tightening supply because of the flow to Asia of Atlantic coal and supply bottlenecks in key exporting countries such as Indonesia, Australia and Colombia.

Colombia's coal output for 2010 will be a couple of million tonnes below the 80 million target due to heavy rains. Indonesian exporters said earlier in the week that their output targets had also been cut due to rains. If Chinese and Indian buyers end up competing for spot cargoes, a sharp price spike cannot be ruled out.

In Europe, demand remains muted although a few utilities in Germany have bought spot tonnage this week, despite a fall in coal burning margins below that of gas for the first time since May.

(Sourced from Reuters)

http://www.steelguru.com/raw_material_news/Stem_coal_prices_surge_to_highest_levels_in_2010/175275.html