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