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Coal and carbon prices struggle

World Coal,

Thompson Reuters Point Carbon has released this week’s Cross Commodity Report.


The Cal-14 contract retreated after the recent strong rally, which seems to be regarded as overdone. As fears diminish over tighter supply caused by delays of Colombian coal exports following the 53-day strike at Drummond’s coal operations earlier this autumn and issues relating to the transition to direct loading operations weighed on the market.

The Cal-14 could face another test of the US$ 80.50/t level, which represented the low point before the recent rally began in mid October. Sentiment seems to be clearly and once again on the negative side, according to the Cross Commodity Report. The CCI indicator is bearish and the MACD also crossed bearish last week.


News that backloading would be discussed soon led to a bullish session on Friday and, following that, traders took profit on Monday. Backloading remained the top price driver with all eyes on German coalition talks that are crucial for further process. After it became clear that the German position is not yet fixed, prices decreased from mid-week, aided by lower prices and a poor German auction result.

On Friday (8 November), member state representatives meet to potentially advance the process. Even though it is not yet fixed, Thompson Reuters Point Carbon said that it assumed Germany would provide a positioning supporting the measure, therefore lifting prices towards the end of the week. That said, the failure of providing such positions implies a bearish risk that could push the Dec-13 contract below the €4.5/t to €4.6/t support area.

Adapted from press release by Sam Dodson

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