Market overview from globalCoal for December 09

In a quiet end to the week liquidity fell away as the festive season starts to kick in. With the main recent outside factors of oil and the Euro failing to provide any meaningful direction coal prices drifted higher on slightly stronger gas and power markets. Across the main coal hubs the API#2 gained marginally by ~$0.20 whilst the API#4 and NEWC were unchanged on the day. Front-month Brent crude fell slightly by ~$0.30/bbl to end the day at ~$107.80/bbl.

Bids for Jan and Feb cargoes are at $110.50 and $110.00, but no offers in the tight Newcastle market. Orica's Koorangang plant will need some time to ramp up production while wet weather is still limiting the supply from the Valley. High stock levels at Chinese ports continue to slow down imports; Fangcheng port was heard to be having more than 5 million tons in its stockpiles with South African coal accounting for a sizeable portion of that. According to some, the market will remain soft for the first half of 2012 but prices are expected to rise again as demand picks up and the hike in electricity tariff encourages utilities to increase generation. (*)

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