Despite natural gas futures climbing above $4/MMBtu on Wednesday, coal prices mostly fell on account of traders unwinding unfavorable positions, a market source said.
Prices are near their year-to-date lows, as the PRB 8,800 Btu/lb front-month contract for October matched its low of $10.80/st, where Platts assessed it Wednesday. The price was last at that mark September 3.
"Traders are getting forced to get out at even more depressed prices," the source said.
But the downward movement didn't faze a different market source, who believes prices could rebound.
"I'm optimistic," the source said. "Natural gas is getting higher and stockpiles are getting lower, so we could see something, but it's way too early to call it."
US coal stockpiles are down roughly 30% from year-ago levels, according to a recent estimate from Bentek Energy, a unit of Platts.
The PRB 8,800 Btu/lb October contract traded Wednesday at $10.85/st for one train (15,000 st), then again at $10.80/st.
A follow-up bid came in at $10.85/st after the 2:30 pm EDT end to the Platts Market on Close assessment process, but the price was marked at the last trade, dropping 20 cents from Tuesday's assessment.
Trading in the financially settled PRB 8,800 Btu/lb contract was limited to two trades for the Q4 2015 contract, which both went at $12.55/st, once for 5,000 st/month and then for 10,000 st/month.
The PRB 8,800 Btu/lb Q4 2015 contract last traded Tuesday at $12.65/st.
In the Eastern market, the Central Appalachia rail (CSX) contract was shut out of Wednesday's session. Platts assessed the front-month (October) price at $53.20/st, unchanged from Tuesday.
In the physically settled CAPP barge market, the Q4 2014 contract traded at $56.05/st for five barges/month. It last traded at $57.20/st on August 28.
In addition, a spread trade between the CAPP barge November and December contracts was flat, with both legs trading at $55.75/st for five barges/month each.
Platts assessed the front-month CAPP barge contract at $$56.20/st, down 5 cents from Tuesday, and the Q4 2014 contract at $55.95/st, down 5 cents, based on broker marks.
Prices also dipped overseas in the Atlantic market Wednesday, where Platts assessed the European-delivered CIF ARA physical spot price for thermal coal (basis 6,000 kcal/kg NAR and for delivery within the next 15-60 days) at $73.65/mt, down $1 from Tuesday.
One London-based trader attributed the weakness in CIF ARA pricing to the global seaborne thermal coal market's oversupply, which looked set to increase with the news that China will restrict the use of high-ash and high-sulfur coal in certain regions from 2015.
