US PRB thermal coal spot prices rise sharply in active session

Washington (Platts)--11Apr2013/144 am EDT/544 GMT


US Powder River Basin 8,800-Btu/lb thermal coal for delivery in the spot month rose to a near two-month high to $10.35/st, as the May physical contract was seen trading five times in the US over-the-counter market.

The May physical contract was assessed up 40 cents/st to $10.35/st, a level not reached by a front month contract since February 12.

Increased trading in the physical market was accompanied by a sharp increase in turnover in the swap market, with trades seen as far out as Cal 2015.

One market source did not see the rise in PRB coal prices as related to the rebound in natural gas futures. "Natgas and PRB don't correlate once natgas gets over $2.50 [MMBtu]," the source said.

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Another market source said that PRB prices may well have been helped by the general upward move in the coal market, as Central Appalachian barge and rail (CSX) coal prices also pushed higher in the session.

In the OTC market, trades were seen in the physical, swap and options markets.

The Q4 2013 call option was seen trading in particularly high volume, going through at 100,000 st/month twice.

PRB 8,800 physical May traded at $10.10/st for one train, at $10.20/st for one train, at $10.25/st for one train twice, and at $10.35/st for one train.

In swaps, PRB 8,800 financial June traded at $10.35/st for 10,000 st twice and 15,000 st, at $10.40/st for 30,000 st/month, at $10.45/st for 10,000 st, and at $10.50/st for 5,000 st/month, 25,000 st/month, 15,000 st/month, and 75,000 st/month. June physical was assessed 30 cents/st higher to $10.50/st.

PRB 8,800 financial Q4 2013 traded at $11.10/st for 10,000 st/month, at $11.15/st for 10,000 st/month twice and 5,000 st/month, and at $11.20/st for 5,000 st/month. The physical price was assessed at $11.30/st, up 25 cents/st.

PRB 8,800 financial Q2 2014 traded at $11.80/st for 10,000 st/month.

PRB 8,800 financial Cal 2014 traded at $11.75/st for 5,000 st/month, at $11.85/st for 5,000 st/month, and at $12/st for 5,000 st/month twice. The physical price was assessed at $12.05/st, up 25 cents/st. This was the highest price for the front year since March 18.

PRB 8,800 financial Cal 2014 over Cal 2015 traded at minus $1.40/st for 5,000 st/month PRB 8,800 financial Cal 2015 traded at $13.35/st for 5,000 st/month.

PRB 8,800 financial Q4 2013 call option with a strike price of $11/st traded at a premium of 70 cents/st and 80 cents/st, each for 100,000 st/month.

The PRB 8,800 financial Cal 2015 put option with a strike price of $13/st traded at premiums of $1/st and 80 cents/st, each for 20,000 st/month.

In the East, CSX financial Q3 2013 over Q4 2013 traded at minus 40 cents/st for 5,000 st/month.

CSX financial Q4 2013 traded outright at $66.25/st for 5,000 st/month. The physical price was assessed at $66.65/st, up 65 cents/st.

CSX over CAPP barge Q4 2013 traded at $4/st for 30,000 st/month over 20 barges/month.

CSX financial Q3 2014 traded at $69.30/st for 5,000 st/month.

Separately, CAPP barge Q3 2013 traded at $60/st for five barges/month, and at $60.25/st for five barges/month. Platts assessed the price at $60.25/st, up 50 cents/st.

Q4 2013 over Q1 2014 traded at minus $1.30/st for five barges/month three times. Q4 2013 was assessed 45 cents/st higher to $62.20/st and Q1 2014 was assessed 35 cents/st higher to $63.50/st.

Q4 2014 traded at $67/st for five barges/month twice.

On the IntercontinentalExchange, CSX May futures were cleared at $65.25/st for 10,000 st twice and 15,000 st, at $65.20/st for 25,000 st and 10,000 st, at $65.15/st for 10,000 st twice, and at $65.10/st for 10,000 st twice

CSX Q3 2013 futures were cleared at $66/st for 5,000 st/month, at $66.05/st for 5,000 st/month, and at $65.98/st for 10,000 st/month.

CSX Q4 2013 futures were cleared at $66.25/st for 5,000 st/month, at $66.40/st for 5,000 st/month, and at $66.30/st for 10,000 st/month.

The futures were seen on-screen with a bid-ask of $65.50-$66.75/st, each for 5,000 st/month. In the last hour before the market-on-close, the spread narrowed slightly to $65.50-$66.50/st, each for 10,000 st/month.

CAPP barge May futures were seen on-screen at $56.50-$57.50/st, each for five barges, before being pulled in the afternoon session.

In the US thermal coal export market, Platts assessed US East Coast thermal coal (6,500 kcal/kg NAR 1% sulfur) unchanged at $82.25/mt.

US Gulf Coast Eastern-origin (6,000 kcal/kg NAR 3% sulfur) was assessed up 25 cents/mt to $55.75/mt.

US Gulf Coast Western-origin (5,000 kcal/kg GAR 0.5% sulfur) was assessed up 25 cents/mt to $45.75/mt.

FOB Canada/US West Coast Western-origin (5,000 kcal/kg GAR 0.5% sulfur) was assessed unchanged at $55/mt.

--Charlie Noh, chang_noh@platts.com
--Edited by Lisa Miller, lisa_miller@platts.com




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