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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Saturday, 15 October 11
BENGAL COAL IMPORT TEST - THE TELEGRAPH
The Telegraph reported that, the power position in Bengal improved today but alarm bells are ringing over imported coal stocks that are running out ...
Friday, 14 October 11
CAPE DERIVATIVES MARKET HAS NOT REFLECTED OWNERS EXPECTATIONS' - FEARNBULK
Handy
The Atlantic market continued its upward trend, with fresh cargo entering the market. Skaw Passero to US Gulf climbed US$ 1500 from la ...
Friday, 14 October 11
ADARO BUYS SERVO MEDA FOR RP200 BIO - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk (ADRO) announced that its subsidiary PT Alam Tri Abadi (ATI), acquired 35% stake in PT Serv ...
Thursday, 13 October 11
DRY BULK MARKETS RALLY CONTINUES, BUT ANALYSTS WARN IT WILL BE SHORTLIVED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market continued its push forward yesterday, for yet another session, as the BDI (Baltic Dry Index), the industry’s benchmark edg ...
Wednesday, 12 October 11
INDONESIAS COAL RUSH - JOSEPH KIRSCHKE
COALspot.com - Last winter, the Chinese government mobilized thousands of soldiers and reservists of the People’s Liberation Army to the port ...
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- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
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