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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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Friday, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
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- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Mjunction Services Limited - India
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
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