European coal prices for delivery this November rose on Thursday on expectations of increased demand from Ukraine after fighting in the east of the country damaged several mines. Cargoes for delivery in November to Amsterdam, Rotterdam and Antwerp (ARA) traded at $76.55 a tonne on the globalCOAL trading platform by 1547 GMT, up $0.30 from Wednesday's settlement.
Traders said prices rose on the news that Ukraine, which is usually an exporter of thermal coal, has turned buyer due to the war which has caused a collapse in production at the damaged mines. Interfax reported late on Wednesday that Ukraine had ordered 1 million tonnes for import from South Africa for delivery before the end of the year.
"That's a considerable amount of coal and I believe they will need more," a coal trader said, adding that Ukraine-based buyers could have been behind Thursday's ARA coal purchases. Meanwhile prices in Australia, the coal benchmark for Asia/Pacific, were down with prices for October delivery from its Newcastle terminal 50 cents cheaper at $66 a tonne, and prices for December delivery down 30 cents at $67.60 per tonne.
Analysts at Bank of America Merril Lynch (BAML) revised down their forecast for Newcastle coal for the second half of the year to $71 per tonne from $74 per tonne and introduced a forecast for 2015 of $73 per tonne. "Looking past 2015, we see a more balanced seaborne coal market. Seaborne prices should then recover to $82 and $89/t in 2016 and 2017 respectively," the analyst said in a research note on Thursday.