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Coal oversupply weighs on prices - the year in numbers

28 Dec 2012 14:24:10 | csd


After 2011 - which saw the CIF ARA front-year contract rise to record highs - the bears took control in 2012, with levels across the international coal markets plummeting, weighed down by the increasing global oversupply.

The US shale gas boom lowered the country's natural gas prices and left the US domestic market saturated with excess coal production - now headed towards Europe and Asia. In addition, Colombian coal - which would traditionally be sold to the US - is being offered into the international markets.

High profitability of coal-fired generation and consequent increased coal demand in Europe has done little to support global coal prices because of high coal availability and softer Chinese demand, which continued to lag behind previous expectations.

With demand low in Asia, many producers in the US, Russia and Australia have already had to scale down production as coal prices in the international market no longer meet their production costs.

Number crunching

19.5% - The value the CIF ARA Year 2013 contract lost since 3 January 2012, as oversupply and continuous global economic concerns weighed down prices.

$109.90/tonne - The highest closing price for a front-month CIF ARA contract, recorded on 5 January 2012.

$19.60/tonne - The amount lost since the CIF ARA front-month swap reached its high on 5 January 2012.

December '12 - The most actively traded DES ARA physical coal contract of the year, with 28 deals recorded, totalling 1.55m tonnes.

November '12 - The most actively traded FOB RB physical contract, which changed hands 34 times, with a total of 1.9m tonnes dealt. The high number of CIF ARA December '12 and FOB RB November '12 deals indicate high European coal demand this winter.

£24.58/MWh - The highest value for a UK clean dark spread recorded since ICIS began calculating the data in November 2009. The UK January '13 clean dark spread out-turned at £24.58/MWh on 5 December 2012.

€23.10/MWh - The biggest spread between the German clean dark and equivalent clean spark contracts, reached by the German December '12 contract on 13 September when the clean dark spread was calculated at €13.39/MWh, while the equivalent clean spark spread outturned at minus €9.71/MWh. MV

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