european coal trades higher in september

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EUROPEAN COAL: CIF ARA trades higher in September
London (Platts)--6Jul2012/949 am EDT/1349 GMT

The European-delivered CIF ARA physical thermal coal prices remained relatively stable Friday, although a higher September trade was seen further out the 90-day window, as the market is in contango, sources said.

A 50,000 mt generic-cargo September Rotterdam-delivery cargo traded via globalCOAL in the morning at $90.25/mt with exchange of futures for physical terms attached.

This was followed shortly by a deal for a 50,000 mt generic-cargo September Rotterdam-delivery cargo deal at a $1.50/mt discount to the API2 (CIF ARA) index.

Around the same time, a September 50,000 mt ICE Rotterdam Coal Future also traded via the globalCOAL screen at $91.75/mt.

The fixed price trade was 65 cents above Platts 90-day assessed price of $89.60/mt Thursday, although within the parameters of the previous day's best onscreen bid-offer range of $90-91/mt.

The deal was also 25 cents above the last September-delivery trade carried out June 26, but $2.50/mt higher than the August-delivery trade of $87.75/mt the previous day.

A Switzerland-based trader placed the September market discount to the API2 index at $1.75-2/mt Thursday, although another Swiss trader said Friday that the $1.50/mt discount was "reasonable." He said demand remains limited, with most of the recent deals seen merely traders filling positions.

"Stocks are high in Europe and despite claims of the market being tighter, there is no shortage of supply. The $1.50/mt discount in September is indicative of where value is and I'd expect [the market] to remain stable," the trader said.

--Jacqueline Holman, [email protected]
--Edited by Jonathan Fox, [email protected]