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Coal prices down, carbon prices up

World Coal,

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


The API2 front year coal contract had a quiet start to last week, remaining almost unchanged on Monday from the previous close at the US$ 82/t level. Prices fell on Tuesday to an almost one-month low, following a sell-off in the market. The bearishness stopped midweek, seeing a small increase on Friday with trader’s buying back short positions, supporting the contract above the US$ 81.5/t level.

Thomson Reuters expects dark spread hedging to provide support his week above the US$ 81/t level. A marker of instability remains the question whether US miner Drummond will continue to export coal from its Colombian operations into early next year. The market lacks direction, with unclear signals coming from the physical market. The report provides a neutral to slightly bullish outlook for this week.


Carbon prices increases early last week following an exaggerated drop the previous Friday. Statements from EU officials that the backloading bill will be fast tracked and a final decision to be taken by the end of 2013 lifted sentiment. Prices dropped later in the week amid worries over upcoming supply from the NER300 and increased selling following the allocation of this year’s permits.

The start of NER300 sales and concerns over the market impact from the allocation of 2013 permits could affect the market this week. However, Thomson Reuters expects prices to remain relatively close to the €4.50/t level.

Edited from various sources by Katie Woodward

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