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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, 20 January 15
INDONESIAN COAL OUTPUT SEEN RISING, DESPITE FALL IN ITS PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 declined month on month and week over week, but Indonesian Coal Output Seen Rising. T ...
Tuesday, 20 January 15
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY DECLINED 2.83% M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 1.45 per MT (-2.83%) month over month and US$ 0.50 (-0.99%) we ...
Monday, 19 January 15
HBA FALL TO FRESH LOWS; COAL OVERSUPPLY WILL CONTINUE TO PUSH PRICE DOWN
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 63.84. T ...
Monday, 19 January 15
CFR SOUTH CHINA COAL SWAPS REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 3.37 (-5.63%) per MT month over month and US$ 0.74 (-1.29%) ...
Monday, 19 January 15
FOB RICHARDS BAY COAL SWAP FOR Q4 DELIVERY CLOSED 4% LOWER THAN Q1 DELIVERY PRICE
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and week over week.
The Q1 swap has f ...
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- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Planning Commission, India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
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