Market overview from globalCoal for December 07

Today saw an early morning rally in the financial coal market on the back of stronger power and gas though this was largely undone in the afternoon session as physical coal offers chased the market down. The benchmark Cal 12 contracts traded heavily but ended broadly unchanged across the three main indices. However, the physical market was moribund and what interest there was mainly focused on the front months. Meanwhile, Jan-12 Brent crude fell $1 to end the day (@ 17:00) at ~$109.80/bbl.

Jan '12 gC Newc was bid at US$110.50 for Jan in 70kt, with a distinct lack of offers in the prompt by newcastle producers and trader - suggesting a relatively tight market. Rains have certainly delayed some production, and the temporary closure of the explosives plant in Newcastle is certainly raising concerns. With the long vessel queue, December cargos are being pushed into the New Year. In China, the announcement late last week that coal prices will be capped from January at 800RMB has certainly meant the Chinese market may not be back in a buying mood till March 2012. (*)

globalCoal trades this week

	Product	Expiry	Price	Volume	Origin	Delivery Point	EFP
05/12/2011	Phys API#4 Index	Feb'12	-$ 1.60	150000
06/12/2011	Phys RB1	Jan'12	$ 104.00	75000
06/12/2011	Phys RB1	Feb'12	$ 104.00	50000			EFP
06/12/2011	Phys ARA (DES)	Feb'12	$ 111.75	50000	ACPRS	Ams/Rot	EFP