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Coal's Two-Year High May Force European Utility Gas Switch: Energy Markets

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phantom power Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-17-10 09:37 AM
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Coal's Two-Year High May Force European Utility Gas Switch: Energy Markets
Coal in Europe is trading close to a two-year high as rising demand in China drives up prices around the world, making natural gas more attractive to U.K. and German utilities for producing electricity.

Benchmark coal for delivery next month in northwest Europe closed yesterday at $107.45 a metric ton, the highest level since Nov. 7, 2008, and traded today at $104.75, according to broker data compiled by Bloomberg. China faces “a moderate shortage” of the fuel that generates 80 percent of its power after temperatures fell below freezing earlier than usual this year, New York-based Commodore Research said on Nov. 15.

“Coal prices are now completely driven by Asian demand, and European utilities have to accept that price,” said Emmanuel Fages, a Paris-based analyst at Societe Generale.

China, the world’s biggest coal user, will import record amounts of the fuel in November and December, according to Commodore. U.K. power plants have struggled in 2010 to make a profit from using coal for the first time in at least three years, according to Bloomberg data. Centrica Plc and RWE AG started gas-fired plants this year in Britain, Europe’s biggest market for the fuel.

http://www.bloomberg.com/news/2010-11-17/coal-s-two-year-high-may-force-european-utility-gas-switch-energy-markets.html
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