European 2014 Coal Drops to Record as Supply Set to Increase
European coal for next year dropped to a record as supply from Colombia may be boosted after an accord between striking workers and management at the nation’s largest mine.
Thermal coal for delivery in 2014 to Amsterdam, Rotterdam or Antwerp fell as much as 0.6 percent to $95.50 a metric ton, the lowest level since the contract started trading in January 2010, according to broker data compiled by Bloomberg. It was at $95.55 at 12:29 p.m. in London.
Striking workers at Colombia’s Cerrejon mine show a “certain tendency toward approving” an agreement reached between union leaders and management on March 4, Sintracarbon union spokeswoman Luz Maria Tobon said in a phone interview. The country exported 79.4 million tons of coal last year, of which 55 percent went to European Union countries, according to Michael Hsueh, a London-based analyst at Deutsche Bank AG.
Rio Tinto Group (RIO) was set to resume operations at its Benga mine in Mozambique after reopening a rail line to a sea port shut since Feb. 20 due to rain damage, Eqstra Holding Ltd. said in a statement.
A recent weakening of the euro against the dollar has also contributed to falling coal prices, according to Paolo Coghe, a Paris-based analyst at Societe Generale SA. The euro has lost 4 percent against the greenback since Jan. 31.
“In the current environment characterized by low demand, any real or perceived increase in supply is going to impact prices negatively,” the analyst said by e-mail.
Bloomberg tracks broker data from ICAP Plc, GFI Group Inc., Marex Spectron Group Ltd., Credit Suisse Group AG, IHS McCloskey, Tradition Financial Services and Tullett Prebon Plc.
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