Central Appalachian coal prices surged higher Monday, with traders buying CAPP barge (OTC) and CAPP rail (CSX) 2011 products, reflecting economic enthusiasm seen across the commodities complex, and the potential for further global supply disruption in key exporting regions.
US OTC coal prices rose despite a public holiday in London.
February CAPP barge traded as high as $82/st before bids walked higher, seeking out a retreating offer. The front-month bid/ask spread ended trading Monday nearly $5/st above the prior Platts assessment of $78.50/st. February CAPP barge coal moved solidly in backwardation with Q2 2011 contracts, despite significant price gains across the forward curve.
CAPP rail prices mirrored the strength in the barge market. Q2 2011 traded outright at $82/st, a full $4.50/st above the December 30 assessment.
Despite gains in CAPP coal prices, Western prices remained mostly flat. In limited trading, February Powder River Basin 8,800-Btu/lb physical traded at $13.05/st, a gain of just 5 cents from the prior Platts assessment.
The NYMEX February natural gas futures contract settled 24.5 cents, 5.6% higher at $4.65/MMBtu, the highest close since December 9.
Front-end CAPP barge saw significant trading volume on Monday. The front month traded at $80.60/st, $81.25/st and $82/st, each for five barges. Bid/offers then walked higher following a March trade at $83.50/st for five barges.
Q2 2011 traded outright at $81.75/st for five barges early in the session, before gapping higher to trade at $82.50/st for five barges. Q2 then traded at $83/st for five, 10, 15 and 20 barges. It then traded at $83.15/st for five barges.
In spread deals, Q2 2011 traded over Q3 2011 flat, closing a prior implied Platts discount of 85 cents. Q2 options saw volume on Monday, with two put trades pricing at a strike of $80/st. The first put carried a premium of $1.90 for 20 barges, while the second had a premium of $2.10 for 10 barges.
Q3 2011 traded in spreads over Q4 2011 at a discount of 40 cents and 35 cents, each for five barges, and at a discount of 25 cents for five barges twice.
Cal 2011 traded in a spread over Cal 2012 at a discount of $1.35/st for five barges, while Q4 2012 traded at $86.20/st for five barges.
In the physical CAPP rail market, January traded at $76/st and reportedly at $77/st, each for the delivery of one train. Q2 2011 traded at $82/st for the delivery of one train while Cal 2012 traded at $85/st for the delivery of two trains.
Financial CAPP rail coal traded once in the Q2 2011 term at $82/st for 5,000 st, which was in line with the observed physical price.
--John P. Miller
US OTC coal prices rose despite a public holiday in London.
February CAPP barge traded as high as $82/st before bids walked higher, seeking out a retreating offer. The front-month bid/ask spread ended trading Monday nearly $5/st above the prior Platts assessment of $78.50/st. February CAPP barge coal moved solidly in backwardation with Q2 2011 contracts, despite significant price gains across the forward curve.
CAPP rail prices mirrored the strength in the barge market. Q2 2011 traded outright at $82/st, a full $4.50/st above the December 30 assessment.
Despite gains in CAPP coal prices, Western prices remained mostly flat. In limited trading, February Powder River Basin 8,800-Btu/lb physical traded at $13.05/st, a gain of just 5 cents from the prior Platts assessment.
The NYMEX February natural gas futures contract settled 24.5 cents, 5.6% higher at $4.65/MMBtu, the highest close since December 9.
Front-end CAPP barge saw significant trading volume on Monday. The front month traded at $80.60/st, $81.25/st and $82/st, each for five barges. Bid/offers then walked higher following a March trade at $83.50/st for five barges.
Q2 2011 traded outright at $81.75/st for five barges early in the session, before gapping higher to trade at $82.50/st for five barges. Q2 then traded at $83/st for five, 10, 15 and 20 barges. It then traded at $83.15/st for five barges.
In spread deals, Q2 2011 traded over Q3 2011 flat, closing a prior implied Platts discount of 85 cents. Q2 options saw volume on Monday, with two put trades pricing at a strike of $80/st. The first put carried a premium of $1.90 for 20 barges, while the second had a premium of $2.10 for 10 barges.
Q3 2011 traded in spreads over Q4 2011 at a discount of 40 cents and 35 cents, each for five barges, and at a discount of 25 cents for five barges twice.
Cal 2011 traded in a spread over Cal 2012 at a discount of $1.35/st for five barges, while Q4 2012 traded at $86.20/st for five barges.
In the physical CAPP rail market, January traded at $76/st and reportedly at $77/st, each for the delivery of one train. Q2 2011 traded at $82/st for the delivery of one train while Cal 2012 traded at $85/st for the delivery of two trains.
Financial CAPP rail coal traded once in the Q2 2011 term at $82/st for 5,000 st, which was in line with the observed physical price.
--John P. Miller
