Prompt physical coal prices on Thursday fell by $1.00-1.50 for the fourth day running as traders and utilities sold fourth-quarter cargoes in expectation of further price falls.

The stagnation which has plagued the coal market for most of this year may be over, they said, now that prices have broken out of their range on the downside and continued to fall.

"Prices have dropped by around $1.00-$1.50 a day this week, there are a lot of sellers out there from all sections of the market," one European trader said.

Prompt South African cargoes for November loading were bid at $100.00 a tonne on Thursday, having been trading at $110-$120 for most of this year and may test and break support at $100, sellers said.

If South African prices do drop below $100 this may trigger some Indian spot buying but probably not enough to stem a further fall because India's ports are full of unsold coal already.

Traders have been sitting on long physical positions for months, particularly American high-sulphur coal, expecting to sell this to Europe or Asia during the winter but the demand has failed to materialise.

Cargoes due to be loaded in November and December need to be sold because they cannot be kept on stockpiles indefinitely and although these do not count as "distressed" yet, the amount of coal being offered is helping accelerate the current slide.

A December delivery DES ARA cargo traded at $113.00 a tonne, down $1.50.

PRICES

A November South African cargo was bid at $100.00 and offered at $109.00.

A December South African cargo was bid at $105.00 and offered at $109.00.

A November DES ARA Russian cargo was offered at $123.00 with no bid - this is an unrealistically high offer level, traders said.