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Thursday, 04 March 10
GLOBAL COAL PRICES GETS SUPPORT FROM EM DEMAND
 Commodity Online reported that, AP12 coal prices look well supported in 2010 thanks to positive outlook for Chinese coal demand whereas coal demand in Europe, rest of the world is shockingly low and stocks have hardly drawn despite the coldest winter in decades, according to an analysis by Bank of America- Merrill Lynch (BofAML).
Japan, by far the biggest importer of thermal coal, cut back on its appetite for coal by almost 20 million mt last year, to 117million mt. Europe took in 22 million metric tons less last year, driven particularly by Spain, Italy, the UK and France as low natural gas prices supported switching out of coal in the power sector
Last year China imported 70.4 mn mt of thermal coal, relative to outflows of 7.8 mn in 2008. China's imports will witness slowdown due to ramping up of internal proudction, according to BofAML.
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“Last year China imported 70.4 mln mt of thermal coal, relative to outflows of 7.8 mln in 2008. China's imports will witness slowdown due to ramping up of internal production” - BofAML
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Coal prices are protected to the downside by the high marginal cost of production, particularly in Russia. However, the oversupply in Europe will likely keep a lid on API2 prices near-term.
API2 front month coal increased from a low of $75/mt in mid December to $97/mt in early January, sharply outpacing other energy markets. Heavy snowstorms led to local power shortages, particularly in the South of the country.
Perhaps more importantly, a much stronger-than-expected cyclical rebound in China drove power generation growth to new highs, up 33% YoY over the past three months, helping to fuel coal demand. Other Asian countries also experienced a turn-around in electricity generation. In turn, due to the heavy snowfall and rail constraints, China resorted to seaborne coal as opposed to domestically produced material. Elsewhere, a glaringly cold winter in Europe provided some support to sentiment. Producer infrastructure constraints, particularly in Australia, South Africa and Indonesia, temporarily tightened the international coal market.
Ultimately, the 3-week rally in coal did not last and prices reversed sharply in mid January as the snowfalls in China receded and the USD strengthened. In recent weeks, front-month API2 coal traded down to $72.75/mt and has been in the $72/mt to $79/mt range. Chinese imports in January, though still at a very high level, cooled off month-on-month basis. Moreover, big European coal users, like Germany, France and the UK, recorded steep demand losses in January, at a time that they experienced the sharpest winter in decade, BofAML analysis said.
In the UK for instance, coal demand in December equalled 4.6 million mt, down from 6.3 million mt in the prior year. Preliminary data indicates that the trend continued over the past weeks.
Traditional European coal suppliers are doing what they can to manage supply to Europe. Russia has reportedly closed some mines to keep exports to Europe low. South Africa is actively diversifying away from Europe towards demand outlets in Asia Pacific. During 2009, 31% of South African exports went to India, from virtually nothing in previous years. That trend was particularly pronounced over the past months. Although in small volumes, South Africa has also been pushing material into China. More absurdly, Colombia-- who typically exports 50-60% of their coal to Europe with the balance going to the Americas--
has now detected interest in Asia.
Colombia exported small volumes to China in December to the tune of 1.5-1.7 million mt, for the first time ever. Of course, sharply lower freight rates are helping these trade flows. As we see continued supply of new Capesize vessels in 2010, freight will likely remain cheap by historical standards in the near-term. Once freight recovers, possibly at the end of this year with the cyclical demand recovery soaking up the supply in ships, these trade-flows are unlikely to be sustainable.
Europe's coal inventories remain at excessive levels at key import ports in Rotterdam and Amsterdam as supply exceeds demand. BofAML sses strong relationship between spreads in AP12 and coal inventories. Hence it is no surprise that the contango in API2 has steepened even more, with front month to front calendar year spreads at the widest since July last year , reflecting the oversupply in the European market and bulging inventories.
Coal markets in the Pacific are a lot tighter, with inventories relatively low in key coal consumers like China, India and South Korea. Meanwhile, the Newcastle coal market is trading in backwardation. Several coal mines in Australia had to declare force majeure in response to severe rainfalls on the east coast which flooded mines, while major rail lines had to close, clogging up the coal chain infrastructure. 47 vessels are currently again lining up outside Newcastle , underscoring that infrastructure problems will not go away easily, BofAML analysis said.
Overall, the outlook for emerging market coal demand remains very positive though. China is expected buy more seaborne coal as as the Chinese Renminbi is likely to be revalued by mid year. In BofAMl analysis, a CNY revaluation is undoubtedly positive for global thermal coal prices. Other EMs likeMexico and Turkey are sharply ramping up coal imports. India continues to suffer from a negative coal balance and will have to rely on the seaborne market for supplies. On a medium-term horizon, we believe that global seaborne coal prices have immense upside from the current level given the growth in coal-fired generation capacity.
Source:Commodity Online - By Madhurima R S
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Thursday, 15 April 10
DRY BULK MARKET SLOWLY GAINING GROUND
The troubled and underperforming capesize sector of the dry bulk market has been experiencing an improved sentiment since Tuesday, a trend verified ...
Tuesday, 13 April 10
CHINA COAL SEEING 'STRONG DEMAND,' PUDA COAL CFO SAYS - BUSINESS WEEK
Business Week reported that, China coal prices will increase this year as the nation’s industry expands and a drought in the southwest region ...
Tuesday, 13 April 10
PEABODY, COAL INDIA CONFIRM 'EARLY STAGE' TALKS - MINING WEEKLY
Mining Weekly reported that, US coal-miner Peabody Energy is holding discussions with Coal India, the company said on Monday, after an Australian ne ...
Tuesday, 13 April 10
ANGLO PREDICTS HIGH COAL PRICES, STEADY SUPPLY
Busrep / Reuters reported that, Coal prices were expected to remain strong this year, while exports would match last year's despite rail cons ...
Tuesday, 13 April 10
THE PANAMAX MARKET CONTINUED TO STRENGTHEN - BRS DRY BULK
Panamax rates continue to beat the market, and the Panamax 4TC is now trading at a 25% premium to the Cape 4TC — the biggest margin since the ...
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- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Australian Coal Association
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
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