Coal Prices Fall on Weak Outlook
- ARA coal for June delivery down $0.45 at $72.05/tonne
- European coal drops below Australian, South African cargoes
European physical coal prices declined on Tuesday as a bearish outlook for demand and oversupply weighed on the market, with one broker also citing aggressive sales by a trading house.
Cargoes for delivery in June to Amsterdam, Rotterdam and Antwerp (ARA) were trading at $72.05 a tonne, around 45 cents below their last close, according to the GLOBALcoal trading platform.
"There's quite heavy selling going on in ARA at the moment, which has pulled European prices from a premium over South Africa and Australia to a slight discount, when excluding freight prices," one coal trader said.
Australian Newcastle cargoes and South African shipments from Richards Bay were trading between $74-76 a tonne.
Overall, weak energy demand due to warm temperatures in most of the northern hemisphere and ample supplies of coal continue to weigh on the market.
Coal prices have dropped more than 40 percent in the last three years due to oversupply combining with slowing demand growth in Europe and Asia.
On Tuesday, Weather Services International predicted a warm, dry summer for northern Europe, which should reduce demand for energy from June to August.
(Reporting by Henning Gloystein, editing by David Evans)
