London — Turkish buyers began to sniff out opportunities as European-delivered thermal coal prices nudged below $80/mt in early morning trading Friday.
S&P Global Platts assessed CIF Turkey (basis 6,000 kcal/kg NAR) at $93/mt, down $1 from last week, based on a survey of market sources.
Turkish cement buyers and utilities are seeing prices drop slightly as they follow global seaborne prices and petcoke prices remain high.
"It is a good development for us," said a cement producer who could purchase either high sulfur coal or petcoke. The buyer was hearing pricing levels for Supramax-sized vessels with up to 1% sulfur at $90-$95/mt CFR Turkey. The origin of the coal was believed to be the US, although Russian coal also was heard pricing into Turkey.
High-sulfur petcoke cargoes were selling at "higher levels than expectations," said the source, who noted a deal at $103/mt CFR Turkey for a high sulfur (6.5%) 45,000 mt cargo arriving in April. Mid-sulfur petcoke cargoes were "too much" to consider, the source said.
Colakoglu, the Turkish power generator which, sources said, purchased a March-loading US cargo at $93-$94/mt CFR Turkey last week, also was heard to be looking for more coal.
POTENTIAL SULFUR REGULATIONS
Keeping some buyers at bay, along with high prices, was the potential for a higher cap on sulfur limits that could bring prices down further.
Multiple government agencies are weighing in on the proposed regulations, which could potentially open up the market for high sulfur US coal and displace low-sulfur Colombian coal. The buyer said he expects a decision within the first half of the year.
Prices were high for Russian coals, which were being limited from the market by ice in some Baltic Sea ports. Black Sea loadings also were limited, sources said.
The source reported hearing Russian coals shipped in Panamax-sized vessels offered at $94-$95/mt CFR Turkey, and US coal was being offered lower.
Russian coals in either Supramax or Panamax-sized vessels were heard being delivered in the low $90s/mt with a mid-to-high $70s/mt netback to Russian ports, a Mediterranean trading source said.
US Illinois Basin and Northern Appalachian high sulfur coals were heard being offered in the high $50s FOB out of the US Gulf Coast and at $81/mt FOB US East Coast, respectively, the source said.
"I don't know if there is much interest at these levels -- they have been the levels for a long time," a Mediterranean trader said.