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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, 20 March 10
NO MAJOR CHANGES ON SUPRAMAX MARKET FOR NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com: “The dry bulk freight market continued to be firm on the Panamax and Supramax and Handy size vessels”, said Capt. Reddy MD ...
Friday, 19 March 10
COAL INDIA TO HIT CAPITAL MARKETS IN JULY
India’s largest coal producer, Coal India Ltd (CIL), expects to hit the capital markets by July, company chairman Partha S. Bhattacharyya said ...
Thursday, 18 March 10
COAL IMPORTS SOAR IN NANTONG PORT OF JIANGSU PROVINCE CHINA
BloombergUTV reported that, Coal imports at Nantong Port, located in coastal China's Jiangsu Province, soared 13 times to 581,000 tonnes in the fir ...
Thursday, 18 March 10
INNER MONGOLIA TO CAP COAL OUTPUT AT 700 MLN TONS IN 2010
Alibaba / China Knowledge reported that, Inner Mongolia, China's northern border autonomous region, plans to control coal output at 700 million ton ...
Thursday, 18 March 10
THE INDIAN MARKET WAS QUIET, BUT BECAUSE OF THE TIGHT TONNAGE SITUATION STILL FIRM - FEARNLEYS AS
Handy
Activity continues to be solid in the Atlantic.
Supramax physical market is strong which pushed the BSI to a 17 month high at ...
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- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
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