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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
Wednesday, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
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- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- VISA Power Limited - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- The University of Queensland
- Minerals Council of Australia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
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