Prices Dip with Gas Market on Warmer Weather
European physical coal prices dipped on Monday as weak summer demand and a tumbling gas market weighed on contracts.
Cargoes for July delivery to Amsterdam, Rotterdam and Antwerp (ARA) traded at $72.80 a tonne on Monday, 20 cents below the previous close, according to the GLOBALcoal trading platform.
"European demand is rock bottom at the moment as it's pretty warm across the continent," one trader said.
"With the football world cup kicking off this week, we're also seeing a lot of people going into an early summer holiday, further denting demand this month, and at the same time Europe's gas market has set another multi-year low today."
"There's really no fundamental reason to go long at the moment, so the only question is how far prices can drop before marginal support kicks in," he added.
British spot gas prices fell to their lowest since September 2010, pulled down by mild demand, high stocks and healthy supplies.
Traders said a firmer oil market had prevented coal prices from dropping even further.
Brent crude rose above $109 a barrel on Wednesday and U.S. crude jumped by $1 a barrel following a sharper-than-expected drop in U.S. oil inventories.
(Reporting by Henning Gloystein, editing by David Evans)