Feb 20 (Reuters) - Prompt South African physical coal prices rose by around 50 cents on Monday as market participants tried to cover short positions taken at the end of last year amid tight supply for March in particular, traders said.

Front-month South African coal prices FOB Richards Bay have held a premium over subsequent months since January for the same reason and despite weak demand in Europe and Asia.

"This is a temporary imbalance and not a good barometer of the market, it's just the front month and is a short-term squeeze," one European trader said.

Players among banks, traders and utilities late last year sold coal swaps and physical in anticipation of being able to buy back at cheaper prices.

Although coal values have been dropping while China has remained out of the spot market, there is still some short-covering, which needs to be done and sellers are reluctant to offer while there's a chance Richards Bay prices will keep ticking higher.

Some Indian enquiries for prompt South African coal were seen but no fresh trades - Indian buyers said they are keeping tabs on prices and waiting for a drop closer to or below $100.

The European DES ARA market is probably a better indicator of the market's strength, traders said.

DES values have continued to hover just below $100 a tonne, barely changed from Friday.

Gas prices for delivery next week eased as forecasts of warm weather weighed on demand, while curve gas rose with oil after Iran halted exports to British and French companies months ahead of a European Union embargo.

PRICES

A March South African cargo was bid at $108.00 and offered at $110.00, up 50 cents on the bid.

An April South African cargo was bid at $105.35 and offered earlier at $105.90, up 40 cents.

A March DES ARA multi-origin cargo was bid at $96.00 and offered at $99.00, unchanged.

An April multi-origin cargo was bid at $99.00 and offered at $100.05, down $1.00 on the offer but unchanged on the bid. (Reporting by Jacqueline Cowhig; Editing by Alison Birrane)