High Coal prices drawing exotic origins

Washington DC (Platts)--25Jun2004

Record spot coal prices are attracting offers of a wider than usual variety of
coal origins, according to traders and generators. The tight supply of
standard, South African Richards Bay coal has driven up prices of that origin.
Russian coal is available, from the Baltic and Black Sea ports, at a discount
of at least a few dollars a tonne to Richards Bay. However, traders and
Russian producer/sellers report that Russian supplies too, are starting to dry
up for the third quarter.

This week generators said they had been offered more high-sulfur (1.5%) US
coal from the Gulf at $70.75/mt FOB, but they conceded that this coal is below
the standard API2 spec and is therefore available at a hefty discount to
standard coals. Few generators can use this high-sulfur coal in Europe but it
presents a tempting option to those which can, they said. Small quantities of
Chinese coal of standard API2 spec, for third quarter delivery, were also said
to be offered at around $76/mt CIF ARA, but no confirmed purchases were
reported.

On Friday, traders, producers and generators agreed that CIF ARA prices have
moved up to $80/mt even for discounted Russian coal, with Richards Bay or
Bolivar quoted at anything up to $86/mt.

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