London (Platts)--11Dec2012/1212 pm EST/1712 GMT
Around 500,000 mt of South African thermal coal has been chartered for shipment to Europe in January, which could put downward pressure on European-delivered CIF ARA prices for February, when the cargoes arrive, market sources said Tuesday. A utility source said that one trading house had chartered three Capesize vessels of Richards Bay coal in January and was intending to ship it to European destinations. He added that some buyers in Turkey might still find 6,000 kcal/kg Richards Bay material attractive at current prices, "or some people might pay a little bit more for low-volatile South African coal." A February-loading Richards Bay 6,000 kcal/kg Panamax cargo traded at $86.75/mt on the globalCOAL screen Tuesday, 75 cents below the previous session's highest bid for the contract. A Switzerland-based source said the trader in question "has got long Richards Bay and now has to find a home for this coal." Sources said any influx of Richards Bay coal landing in Europe in February would put pressure on European-delivered CIF ARA prices. "That's around half a million tons and we could see it displacing Colombian and Russian [coals]," the utility source said. The spot price of South African thermal coal has been the focus of much discussion in the market, with several traders arguing that at current levels, the arbitrage window for Richards Bay cargoes into several key markets is firmly closed. With a March DES Amsterdam-Rotterdam cargo trading at $90.15/mt Tuesday, and Richards Bay-Rotterdam spot Capesize freight valued at around $10/mt by shipbrokers, South African coal prices need to fall by nearly $7/mt to price into Europe.--Gareth Carpenter, gareth_carpenter@platts.com--Edited by Jonathan Dart, jonathan_dart@platts.comSimilar stories appear in International Coal Report. See more information at http://www.platts.com/Products/internationalcoalreport