Low Coal Prices Fuel Demand as Trading Volumes Soar 46%

coal-trains

Image Source:  Power Plant Men

Coal leads surge in European energy exchange trading in first half 2016 -study

Wholesale trading of coal on the exchanges soared 46 percent from a year earlier to 3.5 billion tonnes

FRANKFURT: Coal lead a surge in trading volumes on west European energy exchanges in the first half of this year as traders took advantage of low commodity prices, research company Prospex said on Monday.

Wholesale trading of coal on the exchanges soared 46 percent from a year earlier to 3.5 billion tonnes, according to Prospex.

“Low coal prices mean a fixed amount of trading capital will buy higher volumes than it did in the past,” said Prospex Research director Ben Tait.

“In fact, many traders seeking to hit absolute profit targets have indeed ramped up volumes,” he said.

Prospex’s data covers volumes on what traders call the paper market, where two parties agree deals in the over-the-counter (OTC) market and have them cleared by an exchange.

In coal, this type of business accounts for 98 percent of volumes changing hands in Europe.

Prospex said commodity trading houses remain keen on coal, with some holding extensive physical coal interests that play out on the dominant Amsterdam-Rotterdam-Antwerp (ARA) region of ports that serve Europe’s power stations and steelmakers with raw material.  Read more:  Full Article

 

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