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Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
 In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ahead as they continue to capture market share of coal exports from higher cost producers. Further modest productivity gains, the rapid fall in oil prices and currency devaluation in Australia and Russia will help lower costs. Therefore, Australian mines stands in a relatively strong position compared with higher cost suppliers - particularly those in the US - which are at much greater risk of closures this year. Even with increased closures and reduced US supply, Wood Mackenzie says they do not foresee sufficient volume exiting to balance the market and support price recovery. Lower-than-anticipated demand, especially from China combined with persistent production will be key factors that will sustain the weak market environment.
Australian producers best positioned in 2015
Mr Rory Simington, Principal Asia Pacific Coal Analyst says, “Australia is a standout competitor in both the metallurgical (met) and thermal coal trade, but particularly the former. Comparing 2014 from 2013, while global met coal import demand reduced by about 8 Mt, Australian exports rose by around 14 million tonnes (Mt), growing seaborne market share from 58% to 64%. The scalability of Australian mines and their high coal quality has enabled the displacement of major competitors in US, Canada and Indonesia. This trend is likely to continue thanks to a continued strong operating performance plus currency depreciation. On the other hand, US suppliers, many of which exhibit high costs, will not see the cost relief that currency devaluation brings to Australia.”
Furthermore, increased competition will come from higher Mozambique exports this year as Vale’s Nacala transport corridor ramps up indicating another year of aggressive pricing as producers fight to secure sales. In thermal coal, Australian exports were also strong, leaping 20Mt despite seaborne demand remaining essentially flat last year.
Lower costs discourage large-scale shutdowns
Despite a traumatic 2014 for the coal industry, mine shutdowns were relatively muted. Mr Simington explains, ”In fact metallurgical supply reductions were more than offset by the reduction in Chinese import demand, resulting in increased overcapacity. Although overall closures will accelerate this year, they will unlikely redress the imbalance.” Costly take or pay obligations in the event of closure, makes it more expensive for mines to shutdown than operate at a loss. As such, they remain in production and hamper the return to tighter market conditions. The recent low oil price and exchange rate has driven cost relief for Australia, Indonesia and Russia, which will further reduce the likelihood of wholesale supply cuts as well as delay any price recovery.
China uncertainties depress demand in oversupplied market
China’s economic rebalancing will continue to affect power demand growth and therefore thermal coal requirements. Of critical importance to the seaborne trade will be the effects of Government policies designed to protect the environment as well as domestic coal suppliers. Mr Robin Griffin, Research Director for Global Metallurgical Coal, says, “Current industry focus is on the new trace element restrictions for imported coal. We see most seaborne supply meeting the new guidelines but import levels are affected due to the uncertainty of the accuracy of coal quality tests and delays it may cause to the delivery process. Another big uncertainty to watch is the lengths to which the Chinese Government will go to protect its domestic industry.” Wood Mackenzie says stricter limits on imported coal quality is possible and the Government could make an aggressive move to waive the 17% value added tax (VAT) charged on coal sales which could considerably enhance the competitiveness of Chinese coal and enable some of the best quality and lowest cost Chinese coking coal to compete into Japan, South Korea or Taiwan. Should this occur, worsened oversupply conditions could occur in 2015.
Mr Griffin says “As China makes up 22% of seaborne trade and is expected see continued domestic oversupply, the country will be a major cause of depressed global import demand this year. Market fundamentals outside of China also remain uninspiring, for both metallurgical and thermal coal. Under such circumstances a material price recovery is unlikely this year”.
M&A activities to pick up in 2015
“Mine asset valuations have fallen considerably over the last three years due to the weakening market. Whilst low prices endure more companies will look to shed assets, perhaps to decrease debt or to allow a greater focus on their highest value operations. The negative price environment will persist through 2015 but not forever. Given our expectation of long term strength in coal demand fundamentals, the present market conditions offer a window of opportunity for both suppliers and buyers to consolidate their positions in the industry. We expect M&A to start picking up this year particularly for companies who want to gain a foothold in the industry for the long term.”
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions
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Tuesday, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Minerals Council of Australia
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- PTC India Limited - India
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- White Energy Company Limited
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
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