LONDON: Thermal coal prices rose on Wednesday, reversing some of the previous session's losses, but European coal's premium over the Australian benchmark was still more than $10 a tonne, reflecting concerns about gas supply disruptions to Europe from Russia.
European coal cargoes for delivery in October to Amsterdam, Rotterdam and Antwerp (ARA) were shown at $76.50 a tonne on the GLOBALcoal platform, up $0.90 from the previous settlement.
The premium over Australian prices is now around $10.25 a tonne, which makes it economically attractive to ship coal cargoes to Europe from Australia. The premium over South African prices is $8.60 a tonne.
Australian cargoes for delivery in October from the port of Newcastle were up $0.55 at $66.25 a tonne, while South African cargoes for delivery in October from the Richards Bay terminal were $0.25 higher at $67.85 a tonne.
European physical prices rose on signs that gas supplies to Europe via Ukraine from Russia had started to become disrupted, which would push up demand for coal, traders said.
Poland said on Wednesday it was receiving 20 percent less gas than normal from Russia and a German utility said its supplies of Russian gas were slightly reduced.
Russian gas monopoly Gazprom issued a statement saying it was pumping gas to all destinations "according to the resources available for exports". The coal price rises were in spite of oil dropping to a 17-month low near $98 a barrel, as rising supplies and weak demand helped extend crude's losses into a fifth session.
In other coal markets, China is looking to impose a national cap on coal consumption and a ban on the import of low-quality coal via a new air pollution law, aimed at strengthening the country's efforts to fight smog.
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