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coal prices will have to fall by $5-10 a tonne in Asia or Europe June 10 2011
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Euro Coal-Prices dip, Aug ARA trades at $124.25/T

China buys more discounted Australian

* Coal stays robust despite oil price fall

LONDON, June 10 (Reuters) - Coal prices were 75 cents to $1.50 lower on Friday after a $3 fall in oil and amid a lack of demand for standard-grade coal, particularly in Europe.

Physical coal prices will have to fall by $5-10 a tonne before buyers in Asia or Europe will be drawn back to the market, traders said, but so far the resilience of coal swaps values has prevented physical prices from falling more steeply.

Coal swaps have traded at a premium of a few dollars to physical for several weeks, boosted by strong oil.

Swaps have not reflected the market's fundamental weakness, because they have been influenced more by moves in other markets, but the persistence of prices several dollars above levels at which any buyer is prepared to buy is blocking trade, said utilities, traders and producers.

"Swaps and physical aren't talking to one another. The question is how long can this disconnection continue before something gives?" one utility source said.

UK gas and power prices rose on Friday as low flows from Norway intensified Britain's reliance on liquefied natural gas and high coal prices bolstered gas forward prices ..... read more