Coal Rides Commodities Rally in Push to 10-Month High in Europeby
European coal prices surged to the highest in 10 months, buoyed by rising fuel prices and supply disruptions.
Coal for delivery to northwest Europe next year gained for a ninth day on Monday, adding 3.2 percent to the highest since August 7, according to broker data compiled by Bloomberg. The fuel has rallied 50 percent since February, when it plunged to the lowest since at least 2007.
Coal, which has fallen every year since 2010 amid stricter environmental rules and a global surplus, is tracking oil’s surge from a 12-year low earlier this year as the Bloomberg Commodity Index headed for its highest close since October. Prices are also being helped by reduced supplies due to heavy rains in Indonesia, the world’s biggest exporter of thermal coal, according to Nena AS, an Oslo-based adviser to utilities and energy traders.
“The disruption might be hitting the market now,” said Diana Bacila, an analyst at Nena. “It caused a higher demand in Asia, creating a market for Colombian coal that would normally go to Europe.”
Coal for delivery to Amsterdam, Rotterdam or Antwerp in 2017 rose as much as 3.2 percent to $54.60 a metric ton, before trading at $54.30 by 12:04 p.m. in London, broker data show. The contract has climbed 32 percent this year after losing 39 percent in 2015.
A recent increase in the price of crude, which accounts for about 40 percent of coal mine costs, has been forcing miners to curb output or withhold the commodity from the market, according to Trevor Sikorski, an analyst at Energy Aspects Ltd. in London. A wave of bankruptcies among coal miners has further reduced supply, he said.