London — US FOB thermal coal prices were bearish in the week to Friday as rising dry bulk freight rates ate into FOB levels, while lower prices in several delivered markets added further downward pressure.
Low sulfur Central Appalachian (CAPP) coal continued to be heard with limited availability for the export market. A European trader said he had found it very difficult to procure a fresh cargo of CAPP coal. The source added a fair volume of such coals was bound for the domestics market, and some capacity issues at certain East Coast ports were further limiting availability.
A prominent trading house was heard to be offering CAPP coal at lower prices into the European market, meaning the few tons that were available were under bearish pressure.
Illinois Basin (ILB) coals were heard in better availability; however, demand for coal with these specs was lower due to the high sulfur values as well as other trace elements.
"Even Indian buyers aren't looking for this coal as much anymore," a European trader said.
A trader of ILB coal was heard to have a vessel waiting at Mobile port, with slight delays to the shipment owing to port capacity issues.
A US trader of North Appalachian NAPP coal said prices had drifted lower in the week to Friday. The key driver behind the price movement was higher dry bulk freight rates, according to the source.
The trader concluded a deal for a Panamax shipment for mid-September, at $113/mt CFR India. On an FOB basis, the source placed fair value at $81-82/mt FOB US East Coast.
A Panamax vessel was heard fixed Friday via the Baltic Exchange sailing on the Mobile to Hamburg route at a freight rate of $17.25/mt.
