European coal futures touch highest level since mid-August

European coal futures hit their highest level since the middle of August on Thursday due to a softer dollar and in line with price rises in other European energy markets, while physical prices also rose due to disruptions in Australia. In the futures market, the API2 2017 contract was $0.85 higher at $60.20 a tonne. The contract touched an intra-day high of $60.50 a tonne in earlier trade, its highest level since August 15.
In the physical market, imports into Europe's terminals at Amsterdam, Rotterdam or Antwerp (ARA) in October were up $0.15 at $64.00 a tonne on the globalCOAL platform, their highest for a year and a half. Coal was higher in line with other energy markets such as gas, power, carbon and oil, traders said. The dollar has also softened against the euro, after the Federal Reserve kept US interest rates unchanged on Wednesday, lessening the currency's appeal for international investors.
Dollar-denominated commodities including oil and coal tend to rise in price when the dollar weakens. "Coal is also up from expected new measures from China; there is also rain affecting supply especially in Australia which is struggling to transport coal due to rail issues," one trader added. Australia's coal production has recently been disrupted due to train derailments and bad weather.
Cargo prices for Australian thermal coal from its Newcastle terminal for December were up $0.70 at $74.50 a tonne on globalCOAL. Prices for South Africa's Richards Bay coal in November were $1.15 higher at $68.75 a tonne and the December contract was $0.90 higher at $68.10 a tonne. This week, Australian bank Macquarie raised its thermal coal price forecasts by 17-25 percent through to the end of 2018 after China capped domestic mining activity, spurring imports.
In August, China's coal imports from Australia increased by 35 percent from a year earlier and shipments from Indonesia grew by 55.8 percent, data from China's General Administration of Customs showed on Thursday. Meanwhile, China has called regulators and company executives from the country's major coal producing regions to an "urgent" meeting on Friday, the second in as many weeks as Beijing tries to overhaul the industry while maintaining supplies to major consumers.