Surging ocean freight rates are lifting prices for coal delivered into Europe, which if they continue to increase, could lure additional steam coal out of the US. The assessed price for the dominant European coal contract - API 2 delivered into Rotterdam - has soared more than 20 dollars/metric tonne (mt) this month, from 146.22 dollars/mt on May 1 to 156.59 dollars/mt early last week to jump to 168.61 dollars/mt on May 23. The coal traded even higher on markets today. US East Coast coal prices have steadily climbed into triple-digit territory this year, largely on direct sales to domestic US buyers who can barely find compliance coal, while European exports have been the indirect factor by lowering available supply. The spread between US and European delivered prices could soon favor US stear sales to Europe this year if the API 2 price minus ocean freight rises above the delivered cost of US coals to East Coast ports.
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