Near-curve API 2 swaps bounce despite weak outlook

摘要

European and South African coal swaps rose on the near curve today as the June contract nears delivery, while longer-dated products edged lower. Summer 2020-delivery swaps at both hubs gained on the day, possibly driven by some short-covering as June reaches expiry. Despite the upside, the summer outlook for European coal demand remains weak, as lower gas and power prices continue to squeeze coal margins. Day-ahead gas-to-coal fuel switching thresholds are now negative for 46pc efficient German coal plants in competition with 55pc efficient gas units and above, meaning there is little opportunity to increase load factors at coal plants.