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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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Tuesday, 18 October 11
INDONESIAN PRESIDENT APPOINTS JERO WACIK AS NEW MINISTER OF ENERGY & MINERAL RESOURCES
COALspot.com - Jero Wacik has been appointed as minister of energy and mineral resources of Indonesia replacing Darwin Saleh and Prof. Widjajono Par ...
Tuesday, 18 October 11
DELTA DUNIA MAKMUR HAS PRODUCED 3.0 MILLION TONS OF COAL LAST MONTH
COALspot.com - PT. Delta Dunia Makmur, wholly owned subsidiary, PT Bukit Makmur Mandiri Utama (BUMA), Delta Dunia Makmur has removed 1.4 million bcm ...
Monday, 17 October 11
KOWEPO TO BUY 260,000 MT BITUMINOUS COAL
COALspot.com - KOWEPO has issued a spot tender for 260,000MT of minimum 5,600kcal/kg NAR Bituminous Coal.
The tender document also mentioned tha ...
Monday, 17 October 11
CAPESIZE SHIPPING COSTS CLIMB TO 10-MONTH HIGH ON ORE IMPORTS
The cost to hire capesize vessels climbed to a 10-month high as rising imports of iron ore to China boosted demand for the ships.Monthly iron-ore sh ...
Saturday, 15 October 11
BUNKER PRICES AND DEMANDS PUSHED FREIGHT RATES UP - VISTAAR
COALspot.com - The market continued to be firm with all segments moving up with biggest gain in Handy size segment up by 15 pct. The BDI was u ...
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- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
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