Market overview from globalCoal for May 25

The coal market saw a quiet end to a week that was defined by a major correction in the FOB markets to underline weakness in global demand. After a bout of profit-taking in the morning session, financial coal drifted back off in the afternoon to leave the benchmark Cal 13 contracts down by $0.35 across the board. The physical market remains thin and while bid-offer spreads have tracked downwards uncertainty over direction prevails. Meanwhile, July Brent crude traded up ~$0.25 to end the day (@17:00 London time) at 106.95/bbl.

All the JPUs have decent stock levels at hand, and there is little room for spot cargos. It is believed the Japanese government has initiated discussions around the deregulation of retail power, which would have a large effect on the way Japanese thermal coal buyers will price their purchasing contracts. However, it requires large legal reforms and many believe will take several years to put into place. Meanwhile Newcastle prices continue to fall, with the gC Newc Index for May'12 settling at levels not seen since 2010.

globalCoal trades this week

	Product	Expiry	Price	Volume	Origin	Delivery Point	EFP
21/05/2012	Phys ARA (DES)	Jun'12	$ 83.00	50,000	ACPRS	Rott
22/05/2012	SWAP NEWC Index	Q4'12	$ 99.00	15,000
22/05/2012	SWAP NEWC Index	Q4'12	$ 97.90	15,000
22/05/2012	SWAP NEWC Index	Q1'13	$ 100.00	15,000
22/05/2012	SWAP NEWC Index	Q4'12	$ 96.75	15,000
23/05/2012	Phys ARA (DES)	Jul'12	$ 83.50	50,000	ACPRSU	Ams/Rot