Central Appalachian industry players told Platts on Friday that a few recent spot deals in the $40/st range for CSX-quality coal (12,500 Btu/lb, 1.6 lbs SO2/MMBtu) have moved small volumes to utilities.
A Virginia-based broker said one producer sold a handful of trains during the past few weeks at prices in the low $40s/st. The source added that thermal coal demand remains "extremely low" for all CAPP coal.
A West Virginia producer said there have been some spot CSX coal deals made "considerably" above over-the-counter prices in the $45-$48/st, but noted those deal are very rare in today's market.
The same producer added that utilities have peeked into the market with specialty coal requests, particularly for 12,500 Btu/lb coal with less than 1% sulfur.
Multiple sources said CAPP pricing is still being pressured by brokers and producers willing to sell coal at low prices just to generate cash flow. Recent bankruptcies and fire-sale buyoffs of stockpiles long untouched have put a lot of cheap coal in the hands of players looking to make discounted deals.
The Virginia-based broker said pricing for CSX-quality coal could jump or dip $2-$5/st month to month or even week to week. He said spot deals are so uncommon that any transaction could easily alter the market.
"Things will fluctuate," the broker said. "I think you'll see demand grow in the next few months, but pricing still is going to be too low for producers for a long time."
The source said despite the expected rise and fall of pricing in the near term, at year's end he doesn't see a significant difference in CSX pricing from today's market.
Platts on Friday priced its weekly CSX quality coal (12,500 Btu/lb, 1.6 lb SO2/MMBtu) assessment at $40/st FOB rail for Q2 delivery, up $2.75 from last week.
