LONDON: Prompt European delivered physical coal values fell by around $2.00 a tonne on Tuesday in illiquid trading.
Despite the lack of European end-user buying interest, falls in coal prices are likely to be limited by the dollar's weakeness, which supports dollar-priced commodities such as coal and the euro's strength.
"The dollar's coming under pressure again, which can only help prices but fundamentally not a lot has changed in the past week," one European trader said.
Although there were numerous counterparties in the market from banks, traders and utilities to producers, few trades took place.
The public holidays in the UK and much of Europe in late April and early May are likely to continue to dampen market activity, traders and utilities said.
Prices have been stuck in fairly narrow ranges for the past few weeks and unless China re-emerges soon as a substantial buyer, are unlikely to break out on the upside or downside, they said.
There are some signs that Chinese buying of standard bituminous coal could resume quickly but it has not begun yet, suppliers said.
"China is indeed looking more bullish, the demand seems to be there but how far that translates into new imports remains to be seen," another major European trader said.
Chinese coal prices have climbed again to a five-month high of $124.85 a tonne, making Australian imports almost viable
Chinese power consumption is rising faster than expected, forcing utilities to draw down coal stockpiles. A summer coal shortage is starting to look likely, which would push up prices and trigger more imports.
Although the Chinese government wants to avoid a rise in coal prices as part of its measures to control inflation, it will not be easy to avoid this if power demand is to be met, suppliers said.
TRADES
A June delivery DES ARA cargo traded at $127.00 a tonne.
PRICES
A June loading South African cargo was bid at $121.50 and offered at $123.50, down $2.00.
A July delivery DES ARA cargo was bid at $125.50 and offered at $128.00, down $2.00 on the bid.
A June loading Newcastle cargo was bid at $120.00 and offered at $121.00, down $1.00.
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