Coal had the most remarkable rally in trade Friday.
Not only did the front contract rally back above its 4-year long term downtrend, but the entire curve was repriced substantially higher.
March was up $3.85 to $71.45, while the rest of the curve out to December 2018 is up at least $2.40 per contract with prices between 2018 and 2021 up $1.95 a tonne.
Now futures trade is only a tiny fraction of overall spot or contract trade but Daniel Morgan, Commodity Analyst at UBS, told Business Insider that it could be related to last week’s announcement by Glencore that it “is cutting exports by 15 million tonnes in 2015 as demand falls.”
Morgan said that represents around 1.5% of the global market for seaborne thermal coal. He added that with China importing less at the moment this “doesn’t necessarily tighten the trade massively, but it will move sentiment“.
Newcastle Thermal coal futures have fallen a long way from the $135 a tonne of 2011. But the price moves from the January lows below $60 suggest a base might have been found.