Powder River Basin prompt quarter coal deals remain on par with over-the-counter market prices, but producers remain reluctant to sign deals at those prices over the longer term, sources said Thursday.
No term deals were reported this week as utilities struggle under the weight of excess inventory and producers reduce production in search of market balance.
"We're not seeing many opportunities to offer -- obviously the prompt stuff is very cheap -- with 8,800 Btu/lb coal knocking out the lower Btu guys," a producer said. "I think most producers would try to get higher prices in the out years in exchange for a low year one price."
A Western utility source agreed, saying producers would not typically agree to one-year term prices at anything under $10.50/st.
A second Western utility source also heard request for proposals in the market, but said her company had not gone out for bid in a year.
The utility is "well above" target inventories across the board at all plants, the source said. As a result, the utility has tarped many of its railcars at storage facilities and on short line rail spurs.
"There are so many cars parked -- it's difficult to find places that have room," she said.
Platts assessed PRB 8,800 Btu/lb prompt quarter contract prices at $9.40/st, unchanged on the week, and assessed Cal 2017 prices at $10/st, up 10 cents on the week.
