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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, 18 March 10
INDONESIAN COAL PRODUCTION EXPECTED TO BEAT EARLIER FORECAST
The Jakarta Globe reported that, the government expects coal output this year to exceed its initial projection of 250 million metric tons as the dri ...
Thursday, 18 March 10
COAL PILING UP AT EAST COAST PORTS ON RAKE SHORTAGE
Business Line reported that, more than three million tonnes (mt) of imported coal are awaiting evacuation at the east coast ports of Paradip, Visakh ...
Tuesday, 16 March 10
INDONESIA ROUND VOYAGES WERE GETTING BETWEEN HIGH TEENS - BRS
Another strong week for the bulk market and rates in all segments are now back above pre-Chinese New Year levels. Atlantic volumes remain robust, an ...
Tuesday, 16 March 10
MADHUCON GETS MINING LICENSE IN INDONESIA
Business-Standard reported that, PT Madhucon Indonesia, a subsidiary of the Hyderabad-based infrastructure company Madhucon Projects Ltd, has been g ...
Monday, 15 March 10
BOB KAMANDANU ON INDONESIAS PEAK COAL PRODUCTION, ENERGY SECURITY AND EXPORTS TO INDIA
Bob Kamandanu, the chairman of Indonesian Coal Producers Association (APBI), said the country has an estimated 50 to 70 years of coal reserves.
T ...
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- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
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