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South African coal price surge, while others languish, is troubling

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By Clyde Russell | Reuters

LAUNCESTON, Australia, Dec 5 (Reuters) – Coal prices around the world are gently sliding as demand from top importers such as China, India and even Europe remains subdued amid a so far mild northern winter. However, there is one exception.

South African coal export prices at Richards Bay have surged in recent months, defying market fundamentals and seemingly without logical explanation.

The daily Richards Bay index, as assessed by commodity price reporting agency Argus, jumped 44% from $56.54 a tonne on Sept. 25 to a recent high of $81.30 on Nov. 28.

It has since retreated slightly to end on Wednesday at $81.30 a tonne, but the Richards Bay outperformance over other benchmarks has been staggering.

The price of thermal coal delivered into northwest Europe dropped 16% from a recent high of $64.07 a tonne on Sept. 16 to the close on Wednesday of $54.04.

The weekly index for benchmark Australian thermal coal at Newcastle port has traded sideways in recent months, going from $63.22 a tonne in the week to Sept. 27 to $65.31 in the week to Nov. 29…Full Story

Thermal Coal Update 12th March 2019

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Summary

Australian and Indonesian thermal coals are facing downward pressure as a result of reduced prices in the Chinese market, caused by lower consumption at coastal plants and decent stockpiles. Derivatives were also trading lower on Chinese exchanges. Although there does seem to be some physical activity going on as some buyers seem prepared to wear the demurrage risk for customs delays in China, on Australian cargos.

Australia

April FOB Newc TRADED $ 58.50/mt in 150kt High-Ash 5500NAR

April FOB Newc $57.75 Bid / $59.50 Offered 150kt High-Ash 5500NAR

April FOB Newc heard traded at $92.50 for 25kt via globalCOAL

June FOB Newc heard $94.25 bid / $96.50mt offered in 25kt after the above trade

Indonesia

March FOB Heard Traded around $41.00 in 75kt Basis 3800NAR

April FOB $41.00 Bid heard in 75kt basis 3800NAR following the above trade

3400 NAR material was heard bid $31.75 for a geardvessel loading April

1HApril FOB $59.75 Offered in 75kt 4800NAR

May FOB $50.60 Offered 75kt basis 4400NAR