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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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Tuesday, 06 April 10
ASIAN INVESTORS EYE NIGERIA MARITIME INDUSTRY
Investors from the Asian region are considering investing in the Nigerian maritime sector, which has huge opportunities and potential. One of such p ...
Monday, 05 April 10
RI TO SET REFERENCE FOR COMMODITIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia is set to help establish global reference prices for mining and agricultural commodities, with the establi ...
Monday, 05 April 10
MARCO POLO MARINE SECURES US$20 MILLION 4-YEAR COAL TRANSSHIPMENT CONTRACT
COALspot.com: Accordign to Mraco Polo Marine website, Singapore Exchange Mainboard-listed Marco Polo Marine Ltd, a growing integrated marine logisti ...
Saturday, 03 April 10
SHIPS OPENING FAREAST CONTINUE TO BE STRUGGLING FOR CARGOES - VISTAAR
COALspot.com: The dry bulk freight market continues to be under pressure and all the indices were down this week except for Cape size index which wa ...
Friday, 02 April 10
XSTRATA RAISES BENCHMARK COAL PRICE AS MUCH AS 40% - BLOOMBERG
Bloomberg reported that, Xstrata Plc, the world’s largest exporter of coal used for power, raised benchmark prices for the fuel to an unidenti ...
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- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Parliament of New Zealand
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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