US FOB thermal coal prices strengthened in the week ending Friday as price levels in the consumer markets of Europe and India provided support despite higher dry bulk freight rates.
In addition, supply side tightness was heard stemming from ongoing rail issues at several export terminals, which was exacerbated by thermal coal and metallurgical coal volumes competing for rail and port availability.
Little spot activity was heard for Central Appalachian coal in the week to Friday. Long waiting times were heard at US East Coast ports, with a trader saying the waiting times could be up to 25 days.
Prices were supported by a bullish CIF ARA market, which overcame higher dry bulk freight rates.
S&P Global Platts' FOB Hampton Roads 6,000 kcal/kg NAR price was assessed at $90.40/mt, up $3.30 week on week.
Illinois Basin coal prices also pushed higher through the week. A European trader was looking for spot cargoes during the week, but was met with resistance from low spot availability.
"No one has [Illinois Basin] cargoes for August, if you have some then you can sell at no less than $71-$72/mt FOB," the trader said.
Platts assessed the FOB New Orleans price at $70/mt, basis 6,000 kcal/kg NAR, up $3.50 week on week.
Northern Appalachian coal continued to find its way to Asian markets, with India unsurprisingly being a key demand center.
Indian buyers were heard bidding prices down aggressively to around $80/mt FOB, basis 6,900 kcal/kg NAR, with sellers looking for prices between $84/mt and $84.50/mt FOB.
"South Africa and Indonesia are too expensive," a US seller said. "We won't meet the Indians' expectations, [there is] no need" to.
A cement plant in Pakistan was heard to be looking for a shipment of NAPP coal, with a provisional offer at $115/mt CFR, but no deal was heard concluded by Friday.
A trader said with such high South African coal prices, the buyer would have to accept US coal.
A European utility was heard to be negotiating a deal for NAPP coal. A sulfur discount was heard at around $12/mt, and the seller said they would usually look for a smaller discount, but given the high delivered-Europe prices they were more willing to accept a larger discount.
Platts FOB Baltimore 12,500 Btu/lb GAR price was assessed at $83.50/mt, down $2.15 week on week, as lower prices in India caused sellers to drop their prices.
Dry bulk freight rates on most routes out of the US moved higher this past week.
"Freight is very expensive to sell to Europe, but also all routes," a US sell side source said.
Platts dry bulk freight assessment for a Panamax cargo on the US East Coast-Rotterdam route was most recently assessed at $12.75/mt, up 50 cents week on week, while the US East Coast-east coast of India assessment was $31.50/mt, up 25 cents week on week.
Source: Platts |
