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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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- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Planning Commission, India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
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