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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, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
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