(Reuters circulated the following on July 2.)
HOUSTON — U.S. benchmark coal skidded more than $20 a short ton Wednesday before rebounding to close down $13 in a Europe-led sell-off, trade sources said.
New York Mercantile Exchange Big Sandy barge coal for August traded as low as $122 a short ton, then ended the day at $130.17 for August. It had topped $143 Tuesday.
Rail-delivered coal on the CSX system also was down, though not as much. After touching $160 for August Tuesday, it ended at $152.17 on Wednesday.
The sell-off started in Europe, where traders said some buyers who were long coal at recently soaring prices hit their credit limits and began unwinding positions.
“When they did, that caused some other sell-offs,” said Jim Thompson, managing editor of Coal & Energy Price Report. “The U.S. guys saw the $20 drop, and the market reacted to it.”
Europe recovered late in the day, and the U.S. followed a similar pattern, Thompson said.
September DES ARA coal ended around $212 a metric ton (1.1 short tons) in Europe after topping $226 Tuesday, then sliding to $207 earlier Wednesday.
Tom Hiemstra, director of coal for Evolution Markets, said the drop was not unexpected after an explosive run-up last month.
“We were up $40 in June. It’s just a natural correction,” he said.