June Physical Contract Falls to New Low

European physical coal prices for June fell to a new low on Thursday as warm weather across Europe reduced energy demand and cheaper gas prompted coal producers to reduce their offers.

Cargoes for June delivery to Amsterdam, Rotterdam and Antwerp (ARA) were trading at $71.80 a tonne on Thursday afternoon, down 40 cents since the previous close, according to the GLOBALcoal trading platform.

Earlier this week, the June contract fell to $72, its lowest level in three months.

Coal prices have mostly been in decline for the past couple of months as a mild winter and spring in Europe have reduced energy demand.

Currently, temperatures are mostly too high for central heating to be switched on and too low for air conditioning, which has pulled down orders for coal and thereby prices, traders said.

There is also a glut of coal worldwide, which has reduced the incentive to buy more. A weakening gas market in Europe was also weighing on the coal market on Thursday.

British spot gas prices fell to their lowest level since November 2010 on Thursday as ample supply and inventories outweighed fears of possible cuts in Russian supplies via Ukraine.

Further along the curve, however, ARA coal for delivery in July inched up by 20 cents to $76.25 a tonne.

Traders said this slight gain was mainly due to the market becoming more liquid as the day goes on and as buyers become more confident.

In Turkey, meanwhile, the country's energy minister said safety inspectors have halted operations in two coal mines near where 301 workers were killed in the country's worst industrial accident two weeks ago.

Production has been halted at the Atabacasi and Isiklar fields, operated by Soma Mining, the company that runs the disaster-hit Eynes mine in Soma, located in western Turkey.

(Reporting by Nina Chestney; Additional reporting by Oleg Vukmanovic in Milan; Editing by Pravin Char)