LONDON: Physical coal prices fell by $1.00-$1.50 a tonne on Tuesday in line with weaker UK gas, despite a rise in oil on expectations that the US Federal Reserve will act to stimulate the economy.
Coal tends to lag moves in the oil market but the dearth of spot buying interest in Asia and Europe has started to erode confidence that prices had hit the bottom of the market.
Traders struggled to place spot cargoes and were even more reluctant to buy in a market which could be vulnerable to further falls.
"Prices dropped by $1.00 but there's very little activity," one European trader said.
Three Q4 delivery DES ARA cargoes traded at $91.00, $91.50 and $92.00 on Tuesday, down $1.00-$1.50 from Monday's levels.
Prices will come under renewed pressure unless some buying picks up soon from India and China at the same time as the latest production cuts start to be felt, suppliers said.
On Monday BHP Billiton and Xstrata announced job cuts at mines in Australia, due to squeezed margins from weak coal prices, high costs and the strong Australian dollar. PRICES
A September South African cargo was offered at $85.50, down around $2.00.
An October South African cargo was bid at $85.50 having traded earlier at that level, down $2.00 from Monday's level.
A November South African cargo was bid at $87.00, down $1.00.
A September delivery DES ARA cargo was offered at $89.00, down $2.00. An October DES ARA cargo was offered at $91, unchanged. TRADES
An October South African cargo traded at $85.50, down $2.00 from the previous day.
A November DES ARA cargo traded at $91.00, also down around $1.00.
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