Prices Continue to Slide on Weak Demand
- ARA coal for June delivery down $0.25 at $72.75/tonne
- Warm temperatures sap energy demand
European physical coal prices continued to descend on Monday as warm weather across Europe sapped energy demand.
Cargoes for delivery in June to Amsterdam, Rotterdam and Antwerp (ARA) were trading at $72.75 a tonne, around 25 cents below their last close.
In the futures market, API2 2015 coal contracts were down 19 cents at $82.70 a tonne.
"The warm weather has pulled down orders and prices," a coal trader said.
Temperatures in Europe were very warm on Monday but were expected to drop and the weather become more unsettled in some countries later in the week.
Coal prices have lost more than 40 percent of their value in the last three years due to oversupply. There is also weak demand for coal in Europe and Asia.
A weakened gas market in Europe is also weighing on coal prices. British spot gas prices hit three-year lows on Friday but had regained some ground on Monday.
Low coal prices are now squeezing production margins in many places, especially Australia, where labour costs are particularly high.
Brazilian mining giant Vale said on Friday it plans to close its Integra coal mine in Australia because it is losing money, the latest in company efforts to row back from non-core overseas assets.
(Reporting by Nina Chestney; Editing by Dale Hudson)
