Bit of short term pain coming...* Nov S.African trades at...

Bit of short term pain coming...

* Nov S.African trades at $112.50/T
* Richards Bay stockpiles exceed 5 mln T
* S.Korea offers ray of hope to market longs

LONDON, Oct 3 (Reuters) - Prompt physical coal prices fell sharply on Monday by around $1.50 a tonne after Greece's admission that it will miss its deficit target this year sent markets reeling.

Oil prices slipped towards $101 on Monday on the Greek news, equities and the euro also weakened while the dollar strengthened .

Coal has largely been immune to the volatility seen in other markets although prices have slowly drifted lower by around $10-$15 a tonne since June.

Coal prices reacted more strongly to the Greek debt news and general markets meltdown on Monday because the European utility which has been the primary buyer of note this year was not actively bidding for prompt DES ARA cargoes, traders said.

South African FOB prompt prices also fell by over $1.00, partly because companies who had been defending prices and bidding actively were not doing so.

Coal stockpiles at Richards Bay Coal Terminal last week rose above 5 million tonnes - an uncomfortably high level for producers shipping from RBCT - and this is increasing pressure on them to move the coal from the terminal.

"Everything's gone to hell today, in almost every market, nobody's bidding, everybody's on the sidelines waiting for the dust to settle," one European trader said.
South Korea's switch of coal buying policy to take in more standard grade, to allow plants to run at 100 percent, which is not possible with the amount of low-grade coal already bought, could give Pacific prices some support, suppliers said . ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FACTBOX: Factors supporting coal prices:

TRADES

A November loading South African cargo traded at $112.50 a tonne, down $1.00.

(Reporting by Jacqueline Cowhig)