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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, 09 March 10
MINING LAW OPTIMIZES SECTOR
Law No. 4 / 2009 on Mineral and Coal Mining have given a new direction for the future of mining in Indonesia, including Domestic Market Obligation, ...
Tuesday, 09 March 10
STRONG REBOUND IN ALL THE DRY BULK SEGMENTS THIS WEEK
There was a strong rebound in all the dry bulk segments this week, leading to an 18% jump in the Baltic Dry Index.
The Cape and Panamax markets s ...
Tuesday, 09 March 10
L&T POWER EYEING COAL MINES IN AUS, INDONESIA
L&T Power Development Company, a part of the Larsen & Tubro Group, plans to acquire coal mines in Australia and Indonesia, a top company off ...
Tuesday, 09 March 10
BHP AGREES SHORTER-TERM COAL DEALS WITH EUROPEAN, ASIAN CUSTOMERS
Diversified miner BHP Billiton on Monday reported that it had reached sales terms for a significant portion of its hard coking coal volumes for 2010 ...
Monday, 08 March 10
KPCL TO IMPORT 0.9 MILLION TON OF 6000 GCV COAL
COALspot.com: India's Karnataka Power Corporation Ltd is seeking to import 0.9 million metric tons of 6000 kcal/kg (adb) Gross Calorific Value stea ...
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- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Australian Coal Association
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
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