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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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Monday, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
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- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- The University of Queensland
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
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