Market overview from globalCoal for June 20

Today saw a broadly bullish grip on the market help values higher across the main coal hubs. With paper markets gaining on a stronger Euro as the Greek political parties managed to form a government we saw paper move higher, physical prices also gained on the back of paper as well mild physical buying interest on fixed price products. This was witnessed with an Aug RB1 trade going through at $83.85 for 75ktEven despite Brent oil falling again coal markets hung onto their gains throughout the day. Front month Brent crude ended the day at $93.65/bbl, lower by over $2/bbl. API#2 and API#4 Cal13 paper both gained ~$0.60 whilst the NEWC posted gains of ~$1.20.

After the very bearish tone that has been set post-Bali, a contradiction in terms occurred in the NEWC market today, which became very apparent during the NEWC window. It appears that there is a distinct shortage of July, August, and September tonnage being offered. Bids are being seen from buyers who are genuinely short and offers are very scarce in tradable clip sizes. Weighting on the bid versus the offer today was higher than 2:1. The tone is more bearish in Indonesia, which seems to be suffering worst from defaults and renegotiations at the moment, from both Chinese and Indian buyers. However, there is still interest from both China and India for prompt RB and higher CV sub bituminous material, as well as interest from China for off-spec Australian material. This despite full stockpiles and an Indian currency at a recent all-time low, is perhaps indicative of a floor in the physical markets. Downward pressure seems more likely to come from deterioration in the macro-economic climate rather than physical fundamentals - as far as some of the higher production cost curve coals are concerned.

globalCOAL Trades this Week

?	Product	Expiry	Price	Volume	Origin	Delivery Point	Add.Terms
18/06/2012	Phys HA Aus 5500	Jul'12	$ 79.00	125,000	?	?	?
18/06/2012	Phys ARA (DES)	Aug'12	$ 85.00	50,000	C	Rott	EFP
20/06/2012???	Phys RB1	Aug'12	$ 83.85	75,000	?	?	?