Europe Coal Prices Edge Up

European physical coal prices edged up along with natural gas and wholesale power markets on Monday, and because of an ongoing mining strike in exporter Colombia, but overall price levels remain low as a result of oversupply.

European physical coal for delivery in August rose 25 cents to $73.25 per tonne, and cargoes for delivery in September rose almost a dollar between Friday and Monday to $73.25 a tonne.

"We saw some pretty heavy price rises in gas trading today on the back of some North Sea gas production outages, and that also lifted power markets, allowing coal sellers to raise their offers as well," one coal trader said.

"The ongoing strike in Colombia may at some point affect output, so that's being priced into cargoes for delivery in the next month or two," he added.

Contractors maintaining heavy machinery at Colombia's largest coal mines remained on strike for a sixth day on Monday after fresh attempts to reach a negotiated settlement ended without a deal, a union leader said on Monday.

Despite the slight price rises, coal remains relatively cheap, having halved in value since early 2011, when Japan's Fukushima nuclear reactor meltdown, political unrest in gas-producing North Africa as well as coal mine floods in Australia pushed up global energy prices.

The price decline is a result of healthy output from major miners like Indonesia, Australia, South Africa and Colombia.

Indonesia produced 213 million tonnes of coal in the first half of 2014, up 7.6 percent from the same period last year despite a continuing decline in benchmark prices and efforts to limit output and control exports.

Australian production was also healthy, especially in the first quarter, when it hit a record, and in the Atlantic basin exporter Colombia said late last week that it was on track to meet its 89.1 million production target this year despite repeated strikes affecting mines this year.

(Reporting by Henning Gloystein, editing by David Evans)