Euro Coal Prices Dip on Low Summer Demand

European physical coal prices eased on Tuesday afternoon despite the crisis in Ukraine as weak summer demand meant little need for new fuel orders.

Cargoes for delivery in July to the European ports of Amsterdam, Rotterdam and Antwerp (ARA) traded at $72.75 a tonne, down half a dollar since their last settlement, according to the GLOBALcoal trading platform. The August ARA contract slid by $1.35 to $73 a tonne.

"It's mild across Europe so demand is low and our stocks are also quite well filled, so we're burning those off before ordering new cargoes," one coal trader said.

A blast on Tuesday rocked one of Ukraine's main pipelines supplying Europe with Russian gas, although authorities in Moscow and Ukraine said gas flows were not immediately affected.

The explosion, which Ukraine said may have been a "terrorist attack", came a day after Russian natural gas exporter Gazprom halted deliveries to Ukraine, marking the third such disruption over payments since 2006.

Gas prices rose in the hours after the cut-off, but they eased later on Monday and in most of Tuesday's trading. Europe's gas demand is at its lowest in summer, while alternative gas supplies are healthy and the region well stocked following a mild winter and spring.

Futures also fell, with API2 2015 coal contracts dipping below $80 a tonne.

"If the Ukraine crisis persists, I imagine API will rise back above $80. If some sort of agreement at least over gas is found soon, it will surely drop well below $80 a tonne," another coal trader said.

Although prices of physical coal from South Africa's Richards Bay export terminal came under pressure from the lull in summer demand, its cargoes received some support from India.

India's coal imports, mainly from South Africa, climbed 12 percent in May from a year earlier as scorching weather drove consumers to crank up fans or air conditioning.

Richards Bay cargoes for delivery in July were trading at $74.20 a tonne, down $0.1 from Monday's settlement.

(Reporting by Henning Gloystein; Editing by Dale Hudson)