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European Coal Falls a Third Straight Day as Gas Price Retreats
2010-08-25 10:56:48.467 GMT
By Alistair Holloway
Aug. 25 (Bloomberg) -- European coal prices fell for a
third day as natural gas headed to the lowest close this week,
curbing the appeal of the solid fuel for power generators.
Gas for immediate delivery in the U.K., Europe's biggest
consumer, was 0.4 percent lower at 11:32 a.m. in London. A close
at that level would be the lowest since Aug. 20. Transitgas AG,
operator of a pipeline from northern Europe crossing Switzerland
to Italy, said yesterday that repairs have been delayed and
deliveries aren't expected to resume before three or four
months. That increased supplies in northwestern Europe.
Cheaper gas makes coal less competitive for power utilities
able to switch between the fuels, allowing them to control
costs. Coal for delivery to Amsterdam, Rotterdam or Antwerp with
settlement next year fell 45 cents, or 0.5 percent, to $96 a
metric ton.
Profit from running coal-fired power plants for next year,
the so-called clean-dark spread, is about 5.64 euros ($7.14) a
megawatt-hour, compared with 3.52 euros from burning natural
gas, Bloomberg data showed. The calculation uses electricity
prices in Germany and takes emissions costs into account.
The coal-derivative data are drawn from information
supplied by ICAP Plc, GFI Group Inc., Spectron Group Ltd.,
Credit Suisse Group AG, IHS McCloskey, Bloomberg and Tradition
Financial Services.
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--With assistance by Catherine Airlie in London. Editors: John
Deane, Dan Weeks.
To contact the reporter on this story:
Alistair Holloway in London at +44-20-7330-7780 or
aholloway1@bloomberg.net.
To contact the editor responsible for this story:
Claudia Carpenter at +44-20-7330-7304 or
ccarpenter2@bloomberg.net.
