European coal into Amsterdam/Rotterdam/Antwerp (DES ARA) for delivery in March settled at $90.25/tonne compared with Monday's close of $88.25, data from brokers GlobalCoal showed, propelling the contract to its highest for over two months.
South African cargoes were also priced higher, with coal for March delivery trading at $86.50, up around 50 cents from Tuesday.
"More utilities are becoming concerned about supply from Colombia because we now have the country's two biggest producers impacted by either a strike or an export ban, meaning buyers are having to think about sourcing elsewhere. Some are getting a bit nervous," said one trader with a power generator.
In a statement to employees dated Feb. 19, Drummond said it would reduce its normal 24-hour operations by three-quarters starting on Thursday and had asked the labour ministry for permission to suspend some labour contracts.
"Inventories at load stations are at peak levels and cannot receive more coal from mining operations. Additionally, we have more than 1 million tonnes in inventory at the pits that cannot be transported to loading stations," Drummond said in a statement to employees.
Top Colombian producer Cerrejon earlier this week declared force majeure on some of its shipments as a strike is poised to enter a third week. This means buyers in Europe will have to source more coal from Russia, the United States or South Africa - or draw down on stocks at European ports.
"I suspect the Colombian government is chomping at the bit to resume operations by both Cerrejon and Drummond and again collect taxes, but if the strike continues for its 60-day limit and forces arbitration, there will be fireworks in Atlantic Basin coal pricing," said Ted O'Brien, President of New York-based Doyle Trading Consultants.
Some European buyers said talk of market tightness is overblown, however, because of plentiful availability and slack demand.
API2 Coal swaps for 2014 delivery traded at $99.25, up $0.10 from Tuesday's close.
Baseload German power for 2014 delivery stood at 42.28 euros per megawatt hour, up from 41.97 euros at the close on Tuesday, helped by stronger carbon prices.