Prompt Physical Prices Fall to Lowest Since 2009
Prompt prices for European physical coal dropped to their lowest since 2009 on Friday, as warmer weather and ample supplies continued to weigh on the market.
Cargoes for delivery in June to the European ports of Amsterdam, Rotterdam and Antwerp (ARA) lost 70 cents or 1 percent to $69.00 a tonne on volume of 50,000 tonnes traded, according to the GLOBALcoal trading platform.
The front-month DES ARA contract, down $1 for the week, has fallen by 21 percent so far this year, and is now nearly 50 percent below its 2011 peak of around $135/tonne.
Prices for coal for delivery in August also slipped on Friday, losing 10 cents to $73.00/tonne on volume of 50,000 tonnes.
Prices have been under pressure for several months due to a global oversupply of coal and weak energy demand in Europe due to a mild winter and spring.
Traders said warmer weather across Western Europe this month has further dented already weak demand.
In Britain, falling natural gas prices have made that fuel more competitive with coal, especially when the country's recently increased carbon floor price is taken into account.
The British government in April raised the cost for utilities to pollute to 9.55 pounds per tonne of carbon dioxide.
Burning gas emits around half the amount of CO2 as coal.
In Asia, India's new government on Thursday said it would speed up work on three railway lines seen as key to transporting 100 million tonnes of coal per year from remote mines.
Coal India Ltd, the world's number one coal miner that controls about 80 percent of India's output, says better connections could push its annual production up by as much as 300 million tonnes from 462 million now.
Japan's 10 regional power monopolies used less coal in May as gas consumption rose, industry data showed. Utilities are relying on fossil fuels to offset a shutdown of the nation's nuclear industry following the 2011 Fukushima crisis.
(Reporting by Michael Szabo; Editing by Erica Billingham)
