High mine stockpiles weigh on US Illinois Basin coal offers

US Illinois Basin thermal coal contract price remain unchanged for prompt-quarter delivery, although rising mine stockpiles are leading to some lower offers in the marketplace.

Warm weather and the pending shoulder season between winter and summer demand has cut into prompt demand, sources said. One mine was heard with stockpiles at an estimated 800,000 st.

One Illinois Basin fuel buyer reported hearing offers in the mid-$30s for various coals.

The buyer heard offers at $35/st FOB barge for 11,500 Btu/lb thermal coal with 5.5 lbs SO2. An Illinois producer offered 11,800 Btu, 4.5 lbs SO2 at $33/st, the source said.

"There is a lot of coal in inventory waiting at the mines," he said. "You could probably shave a dollar off those. That is my personal view."

Forward prices are in contango, with producers cutting back on production and not wanting to cut losses into 2017-2019, the source said.

"People usually jump the price out pretty good further out," he said. "They're just not going to gamble right now."

Platts assessed prompt-quarter prices for low chlorine 11,800 Btu/lb IB, 5 lbs SO2 thermal coal at $35.50/st, and assessed 11,500 Btu/lb, 5 lbs SO2 thermal coal at $34/st. Both were unchanged from the previous assessment.

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