Spot demand for Utah thermal coal has picked up as a utility buyer is looking for 10 trains in the second quarter, a producer source said Monday.
A utility buyer is seeking 70,000-75,000 st of coal for prompt quarter delivery, the source said. The demand appears to be caused by either forced outages or the need for voltage support, not due to power demand.
"We're beginning to see utilities start to be interested in spot deals," the producer source said. "It's a good thing."
Utah's coal business also has been bolstered by industrial demand from California, Utah and Arizona, he said.
With NYMEX March natural gas futures prices at $1.821/MMBtu Monday and cheap hydropower available, demand for coal has dropped, but Utah's tight market has held its own compared to an oversupplied Colorado market, the source said.
Platts assessed Utah's 11,500 Btu/lb thermal coal for Q2 at $37/st, down $1 from the last assessment.
The spread between Utah and Colorado coal is typically $9-$10, the source said.
"I'm hearing a lot of competitors in Colorado have an unsold position," he said. "That doesn't bode well for price support."
Platts assessed Colorado's 11,700 Btu/lb coal at $29/st, down 50 cents from the last assessment, and assessed Colorado's 11,000 Btu/lb coal at $25.50/st, down $1.
