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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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Saturday, 27 March 10
CHINA TO REMAIN NET COAL IMPORTER IN NEAR FUTURE - STEEL GURU
Xinhua News cited Mr Wu Chenghou a councilor with the China Coal Transportation and Marketing Association as saying that China will remain a net coa ...
Friday, 26 March 10
CHINA PLANS TO INCREASES IMPORT COAL GREATLY IN 2010
– Asia Pacific Coal Trading & Investment Outlook 2010-
COALspot.com (Press Release): China plans to increase coal import significantly ...
Friday, 26 March 10
NTPC IN TALKS FOR INDONESIAN MINE - LIVE MINT
The deal for the coal mine with 1.8 bn tonnes of reserves may be valued at $1 bn
Live Mint reported that, State-run power utility NTPC Ltd is in ta ...
Friday, 26 March 10
ESSAR GROUP SIGNS DEAL FOR INDONESIAN COAL MINE - BUSINESS LINE
Looking ahead
The coal from the Indonesian mine would provide raw material to the group's power projects
The Aries coal mines acquired by the gro ...
Thursday, 25 March 10
CHINA RAILWAY WINS $4.8 BILLION INDONESIA PROJECT - BLOOMBERG
Bloomberg reported that, China Railway Group Ltd. won a $4.8 billion order from PT Bukit Asam, Indonesia’s state-owned coal producer, for a co ...
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- ASAPP Information Group - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
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