Coal traders turn to private finance as high demand lifts prices

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Coal traders are turning to private finance to keep shipments moving after a European ban on Russian imports sent prices up fivefold.

Heightened demand for the polluting commodity — as well as the high yields traders are ready to pay to access credit — have underpinned the increasing willingness of funds to bankroll trades.

Such financing opportunities attract funds with a focus on commodities, but also those that have traditionally concentrated on generic trade finance. The trading margins on coal are so good that the market can cope with sky-high lending rates, according to Chris Scott, chief financial officer of Novum Energy Trading Corp., which specializes in oil products but also trades US and Colombian coal.

 

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