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Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
 Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzie’s Near-Term Market Outlook cautions of falling metallurgical coal prices from now to Q4 2012, dropping from the current quarterly price of US$285/tonne for premium hard coking coal to under US$240/tonne. However, this price remains significantly above the marginal cost of production and longer-term drivers point to robust metallurgical coal demand in the Asia-Pacific market.
Prakash Sharma, Coal Market Analyst says, “Prices have started to fall from the last quarter and will continue to decline due to softening demand and the recovery of supply from flood-hit basins earlier in the year. The weakening demand is largely attributed to the global macroeconomic slowdown which appears to have accelerated through the summer in much of the developed world. Leading industrial indicators suggest a sharp deterioration in manufacturing activity – reflected by the decline in global steel production.”
Wood Mackenzie’s Senior Economist, Ed Rawle says, “The global economy has entered a period of extreme uncertainty. Wood Mackenzie’s global Gross Domestic Product growth forecast has been revised down from 3.1% to 2.8% in 2011, and 3.7% to 3.6% in 2012. But there are significant downside risks to this outlook. The Eurozone debt crisis remains unresolved and threatens to trigger a European banking crisis. Due to the sheer scale of the European banking sector, this is of major concern since it would likely lead to a global banking crisis with implications for us all.”
Despite near-term downward price movements, Wood Mackenzie says that several factors have the potential to turn this trend. Firstly, some mines have not fully recovered from the 2011 Queensland floods. The approaching wet season could lead to further delays in some mines attaining full production levels. Secondly, persistent worker-strikes at BHP Billiton Mitsubishi Alliance operated mines have the ability to tighten the market as these operations produce 26% of globally traded metallurgical coal. Lastly, US low-volatility supply has been curtailed by mine outages and changes in blending techniques following various mergers.
In the long-term , investors are still energized by the coking coal space with high margins in a current supply-constrained world. Mr. Sharma explains, ”Strong long-term demand is likely to support Mergers & Acquisitions (M&A) activity that has been ongoing since early 2008. Demand growth will be led by emerging markets with Asia accounting for 75% of global metallurgical coal demand by 2030. China and India will be key demand drivers, contributing to 60% of Asia Pacific’s total import demand.”
The growth potential of China and India can be attributed to their economic climate relative to the rest of the world. Mr. Rawle says, “The bright spot amidst the uncertainty continues to be the developing world. Specifically, we see China and much of Asia powering ahead, drawing on growth drivers that have been deliberately de-coupled from troubled developed economies over the past couple of years.”
Wood Mackenzie says that China’s reliance on coking coal imports will increase due to insufficient supply of high quality coking coal in the domestic market. China is forging ahead with plans to close all blast furnaces under 1,000 cubic metres and install new blast furnaces with capacities in excess of 2,000 cubic metres. The larger furnaces need coke produced from high-quality coking coal. As a result, a larger volume of this type of coal will be required and China will have to turn to suppliers of the likes of Australia, Mongolia and, to a lesser extent, Mozambique who are all expanding supply.
In summary, Mr. Sharma says, ”The industry should expect premium metallurgical coal prices to fall to a price below US$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
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- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Central Java Power - Indonesia
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