Physical coal prices for delivery into Europe broke record levels over $US100 ($NZ136.25) a tonne, as the worldwide rally in energy prices broke through into the opaque and fragmented coal market.

Coal prices have been rising all year as availability has progressively tightened. Unfortunately for consumers, freight rates have also repeatedly hit record levels, forcing up the delivered cost of coal.

Three Q4 delivery coal cargoes traded on Thursday, one at $US102.00 a tonne DES ARA and one at $US101.00 DES ARA on the globalCOAL trading platform. A further parcel was sold at $US101.00 through brokers, traders said.

These were the first visible, on-screen coal trades ever at over $US100.00 a tonne. In January, CIF/DES ARA coal prices were around $US65.00 a tonne.

Prices of prompt loading South African coal cargoes bounced back above $US65.00 a tonne free-on-board (FOB) Richards Bay on Thursday, having drifted down to around $US63.85 for an October cargo on Wednesday.

A flurry of four trades within minutes of each other on electronic trading platform globalCOAL saw prices rise to the highest traded level on Thursday of $US65.50 a tonne for a December loading panamax.

Two November loading panamaxes traded at $US65.00 and $US65.25 a tonne and two December panamaxes at $US65.50 and $US65.30.

There were several companies involved in the trades including banks, traders and a major European utility/trader.

The buyers were covering short positions for Q4, one of the companies involved said.

South African availability for Q4 and Q1 is tight and getting tighter, traders and utilities said.

Prices for prompt cargoes could rise to $US70.00 or more within weeks if Indian buyers return to the market as expected for two million tonnes for Q4 shipment, traders said.

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